Question 1

At the equilibrium price,the quantity that buyers want to buy exactly equals the quantity that sellers want to sell.

Accepted Answer

A) True 
 B)False

Question 2

If a price floor is a binding constraint on a market,then

Accepted Answer

A)   the equilibrium price must be above the price floor.
B)   the quantity demanded must exceed the quantity supplied.
C)   sellers cannot sell all they want to sell at the price floor.
D)   buyers cannot buy all they want to buy at the price floor.E) A) and C)
F) All of the above

Question 3

Figure 6-21 
-Refer to Figure 6-22.The price that buyers pay after the tax is imposed is

Accepted Answer

A)   $5.
B)   $6.
C)   $7.
D)   $8.E) B) and D)
F) All of the above

Question 4

A binding minimum wage raises the incomes of some workers,but it lowers the incomes of workers who cannot find jobs.

Accepted Answer

A) True 
 B)False

Question 5

The burden of a luxury tax most likely falls more heavily on sellers because demand is more elastic and supply is more inelastic.

Accepted Answer

A) True 
 B)False

Question 6

Studies by economists have found that a 10 percent increase in the minimum wage decreases teenage employment 10 percent.

Accepted Answer

A) True 
 B)False

Question 7

Advocates of the minimum wage

Accepted Answer

A)   deny that the minimum wage produces any adverse effects.
B)   emphasize the benefits to teenagers of increases in the minimum wage.
C)   emphasize the low annual incomes of those who work for the minimum wage.
D)   All of the above are correct.E) None of the above
F) B) and C)

Question 8

Lawmakers can decide whether the buyers or the sellers must send a tax to the government,but they cannot legislate the true burden of a tax.

Accepted Answer

A) True 
 B)False

Question 9

Figure 6-27 
-Refer to Figure 6-27.If the government places a $2 tax in the market,the seller receives $6.

Accepted Answer

A) True 
 B)False

Question 10

Suppose the government imposes a 20-cent tax on the sellers of artificially-sweetened beverages.The tax would shift

Accepted Answer

A)   demand,raising both the equilibrium price and quantity in the market for artificially-sweetened beverages.
B)   demand,lowering the equilibrium price and raising the equilibrium quantity in the market for artificially-sweetened beverages.
C)   supply,raising the equilibrium price and lowering the equilibrium quantity in the market for artificially-sweetened beverages.
D)   supply,lowering the equilibrium price and raising the equilibrium quantity in the market for artificially-sweetened beverages.E) C) and D)
F) A) and D)

Question 11

A binding minimum wage tends to

Accepted Answer

A)   cause a labor surplus.
B)   cause unemployment.
C)   have the greatest impact in the market for teenage labor.
D)   All of the above are correct.E) B) and C)
F) All of the above

Question 12

Figure 6-14
The vertical distance between points A and B represents the tax in the market. 
-Refer to Figure 6-14.The effective price that sellers receive after the tax is imposed is

Accepted Answer

A)   $6.
B)   $10.
C)   $16.
D)   $24.E) None of the above
F) A) and B)

Question 13

Which of the following is not correct?

Accepted Answer

A)   Some states in the U.S.mandate minimum wages above the federal level.
B)   Most European nations have minimum-wage laws.
C)   The U.S.minimum wage is significantly higher than the minimum wages in France and the United Kingdom.
D)   The U.S.Congress first instituted a minimum wage with the Fair Labor Standards Act.E) C) and D)
F) B) and C)

Question 14

Figure 6-1
 
-Refer to Figure 6-1.A binding price ceiling is shown in

Accepted Answer

A)   panel (a) only.
B)   panel (b) only.
C)   both panel (a) and panel (b) .
D)   neither panel (a) nor panel (b) .E) All of the above
F) B) and C)

Question 15

Figure 6-25
 
-Refer to Figure 6-25.In which market will the majority of the tax burden fall on sellers?

Accepted Answer

A)   market (a) 
B)   market (b) 
C)   market (c) 
D)   All of the above are correct.E) C) and D)
F) None of the above

Question 16

Figure 6-27 
-Refer to Figure 6-27.If the government places a $2 tax in the market,the seller bears $2 of the tax burden.

Accepted Answer

A) True 
 B)False

Question 17

How does elasticity affect the burden of a tax? Justify your answer using supply and demand diagrams.

Accepted Answer

The tax burden fal...

Question 18

A price floor set above the equilibrium price causes a surplus in the market.

Accepted Answer

A) True 
 B)False

Question 19

A binding minimum wage creates a shortage of labor.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not a function of prices in a market system?

Accepted Answer

A)   Prices have the crucial job of balancing supply and demand.
B)   Prices send signals to buyers and sellers to help them make rational economic decisions.
C)   Prices coordinate economic activity.
D)   Prices ensure an equal distribution of goods and services among consumers.E) B) and C)
F) A) and B)

Exam 6: Supply,demand,and Government Policies

A price floor set above the equilibrium price causes a surplus in the market.

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Lawmakers can decide whether the buyers or the sellers must send a tax to the government,but they cannot legislate the true burden of a tax.

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Which of the following is not correct?

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Figure 6-27 -Refer to Figure 6-27.If the government places a $2 tax in the market,the seller receives $6.

Correct AnswerverifiedShow Answer

Suppose the government imposes a 20-cent tax on the sellers of artificially-sweetened beverages.The tax would shift

Correct AnswerverifiedShow Answer

Figure 6-1 -Refer to Figure 6-1.A binding price ceiling is shown in

Correct AnswerverifiedShow Answer

Figure 6-27 -Refer to Figure 6-27.If the government places a $2 tax in the market,the seller bears $2 of the tax burden.

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A binding minimum wage tends to

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Figure 6-25 -Refer to Figure 6-25.In which market will the majority of the tax burden fall on sellers?

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A binding minimum wage raises the incomes of some workers,but it lowers the incomes of workers who cannot find jobs.

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Which of the following is not a function of prices in a market system?

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Studies by economists have found that a 10 percent increase in the minimum wage decreases teenage employment 10 percent.

Correct AnswerverifiedShow Answer

At the equilibrium price,the quantity that buyers want to buy exactly equals the quantity that sellers want to sell.

Correct AnswerverifiedShow Answer

The burden of a luxury tax most likely falls more heavily on sellers because demand is more elastic and supply is more inelastic.

Correct AnswerverifiedShow Answer

Figure 6-21 -Refer to Figure 6-22.The price that buyers pay after the tax is imposed is

Correct AnswerverifiedShow Answer

Advocates of the minimum wage

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How does elasticity affect the burden of a tax? Justify your answer using supply and demand diagrams.

Correct Answerverified The tax burden fal...View AnswerShow Answer

A binding minimum wage creates a shortage of labor.

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If a price floor is a binding constraint on a market,then

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Figure 6-14 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-14.The effective price that sellers receive after the tax is imposed is

Correct AnswerverifiedShow Answer

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The tax burden fal...
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