Question 1

In "Venezuela Versus the Market," the price control placed on coffee

Accepted Answer

A)   created a shortage of coffee.
B)   resulted in higher profits for coffee growers.
C)   increased coffee exports to other countries.
D)   increased the amount of land and coffee used in production.E) A) and B)
F) C) and D)

Question 2

In the 1970s, long lines at gas stations in the United States were primarily a result of the fact that

Accepted Answer

A)   OPEC raised the price of crude oil in world markets.
B)   U.S. gasoline producers raised the price of gasoline.
C)   the U.S. government maintained a price ceiling on gasoline.
D)   Americans typically commuted long distances.E) None of the above
F) B) and C)

Question 3

A price ceiling set above the equilibrium price is not binding.

Accepted Answer

A) True 
 B)False

Question 4

Table 6-4
The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price floor $3 above the equilibrium price in this market.
 
-Refer to Table 6-4. How many units of the good are sold after the imposition of the price floor?

Accepted Answer

A)   3
B)   9
C)   15
D)   18E) A) and D)
F) A) and B)

Question 5

Figure 6-33 
-Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. What price will buyers pay for the good after the tax is imposed?

Accepted Answer

Buyers wil...

Question 6

An alternative to rent-control laws that would not reduce the quantity of housing supplied is

Accepted Answer

A)   the payment by government of a fraction of a poor family's rent.
B)   higher taxes on rental income earned by landlords.
C)   a policy that prevents landlords from evicting tenants.
D)   a policy that allows government to confiscate residential property for the purpose of commercial development.E) A) and C)
F) A) and B)

Question 7

Regardless of whether a tax is levied on sellers or buyers, taxes discourage market activity.

Accepted Answer

A) True 
 B)False

Question 8

When a binding price ceiling is imposed on a market,

Accepted Answer

A)   price no longer serves as a rationing device.
B)   the quantity supplied at the price ceiling exceeds the quantity that would have been supplied without the price ceiling.
C)   all buyers benefit.
D)   All of the above are correct.E) A) and D)
F) B) and D)

Question 9

Figure 6-8 
-Refer to Figure 6-8. When a certain price control is imposed on this market, the resulting quantity of the good that is actually bought and sold is such that buyers are willing and able to pay a maximum of P1 dollars per unit for that quantity and sellers are willing and able to accept a minimum of P2 dollars per unit for that quantity. If P1 - P2 = $3, then the price control is

Accepted Answer

A)   a price ceiling of $2.00.
B)   a price ceiling of $5.00.
C)   a price floor of $5.00.
D)   either a price ceiling of $2.00 or a price floor of $5.00.E) None of the above
F) All of the above

Question 10

Figure 6-29
Suppose the government imposes a $2 on this market. 
-Refer to Figure 6-29. Suppose D1 represents the demand curve for paperback novels, D2 represents the demand curve for gasoline, and S1 represents the supply curve for paperback novels and gasoline. After the imposition of the $2 on paperback novels and on gasoline, the

Accepted Answer

A)   buyers of gasoline bear a higher burden of the $2 tax than buyers of paperback novels.
B)   sellers of gasoline bear a higher burden of the $2 tax than sellers of paperback novels.
C)   buyers of gasoline bear an equal burden of the $2 tax as buyers of paperback novels.
D)   Both a)  and b)  are correct.E) None of the above
F) A) and D)

Question 11

When a tax is placed on the buyers of a product, the

Accepted Answer

A)   size of the market decreases.
B)   effective price received by sellers decreases, and the price paid by buyers increases.
C)   demand for the product decreases.
D)   All of the above are correct.E) All of the above
F) A) and C)

Question 12

A tax on golf clubs will cause buyers of golf clubs to pay a higher price, sellers of golf clubs to receive a lower price, and fewer golf clubs to be sold.

Accepted Answer

A) True 
 B)False

Question 13

Figure 6-6 
-Refer to Figure 6-6. If the government imposes a price ceiling of $8 on this market, then there will be

Accepted Answer

A)   no shortage.
B)   a shortage of 10 units.
C)   a shortage of 20 units.
D)   a shortage of 40 units.E) A) and B)
F) A) and C)

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

Opponents of the minimum wage point out that the minimum wage

Accepted Answer

A)   encourages teenagers to drop out of school.
B)   prevents some workers from getting needed on-the-job training.
C)   contributes to the problem of unemployment.
D)   All of the above are correct.E) A) and B)
F) All of the above

Question 16

Table 6-6
 
-Refer to Table 6-6. If the government set a price ceiling at $4, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price ceiling set at $4 woul...

Question 17

The wedge between the buyers' price and the sellers' price is the same, regardless of whether the tax is levied on buyers or sellers.

Accepted Answer

A) True 
 B)False

Question 18

A tax imposed on the sellers of a good will lower the

Accepted Answer

A)   price paid by buyers and lower the equilibrium quantity.
B)   price paid by buyers and raise the equilibrium quantity.
C)   effective price received by sellers and lower the equilibrium quantity.
D)   effective price received by sellers and raise the equilibrium quantity.E) B) and D)
F) A) and D)

Question 19

To say that a price floor is binding is to say that the price floor

Accepted Answer

A)   results in a shortage.
B)   is set below the equilibrium price.
C)   causes quantity supplied to exceed quantity demanded.
D)   All of the above are correct.E) B) and C)
F) B) and D)

Question 20

Figure 6-25 
-Refer to Figure 6-25. The price that buyers pay after the tax is imposed is

Accepted Answer

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

Exam 6: Supply, Demand, and Government Policies

Correct Answer
verified

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

Correct Answer
verified

A price ceiling set above the equilibrium price is not binding.

Correct Answer
verified

When a tax is placed on the buyers of a product, the

Correct Answer
verified

Regardless of whether a tax is levied on sellers or buyers, taxes discourage market activity.

Correct Answer
verified

In "Venezuela Versus the Market," the price control placed on coffee

Correct Answer
verified

To say that a price floor is binding is to say that the price floor

Correct Answer
verified

Figure 6-6 -Refer to Figure 6-6. If the government imposes a price ceiling of $8 on this market, then there will be

Correct Answer
verified

A tax on golf clubs will cause buyers of golf clubs to pay a higher price, sellers of golf clubs to receive a lower price, and fewer golf clubs to be sold.

Correct Answer
verified

The wedge between the buyers' price and the sellers' price is the same, regardless of whether the tax is levied on buyers or sellers.

Correct Answer
verified

In the 1970s, long lines at gas stations in the United States were primarily a result of the fact that

Correct Answer
verified

Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. What price will buyers pay for the good after the tax is imposed?

Correct Answer
verified
Buyers wil...
View Answer

Correct Answer
verified

Opponents of the minimum wage point out that the minimum wage

Correct Answer
verified

Correct Answer
verified

When a binding price ceiling is imposed on a market,

Correct Answer
verified

Table 6-6 -Refer to Table 6-6. If the government set a price ceiling at $4, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct Answer
verified
A price ceiling set at $4 woul...
View Answer

Figure 6-25 -Refer to Figure 6-25. The price that buyers pay after the tax is imposed is

Correct Answer
verified

An alternative to rent-control laws that would not reduce the quantity of housing supplied is

Correct Answer
verified

A tax imposed on the sellers of a good will lower the

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A price ceiling set above the equilibrium price is not binding.

Correct AnswerverifiedShow Answer

When a tax is placed on the buyers of a product, the

Correct AnswerverifiedShow Answer

Regardless of whether a tax is levied on sellers or buyers, taxes discourage market activity.

Correct AnswerverifiedShow Answer

In "Venezuela Versus the Market," the price control placed on coffee

Correct AnswerverifiedShow Answer

To say that a price floor is binding is to say that the price floor

Correct AnswerverifiedShow Answer

Figure 6-6 -Refer to Figure 6-6. If the government imposes a price ceiling of $8 on this market, then there will be

Correct AnswerverifiedShow Answer

A tax on golf clubs will cause buyers of golf clubs to pay a higher price, sellers of golf clubs to receive a lower price, and fewer golf clubs to be sold.

Correct AnswerverifiedShow Answer

The wedge between the buyers' price and the sellers' price is the same, regardless of whether the tax is levied on buyers or sellers.

Correct AnswerverifiedShow Answer

In the 1970s, long lines at gas stations in the United States were primarily a result of the fact that

Correct AnswerverifiedShow Answer

Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. What price will buyers pay for the good after the tax is imposed?

Correct AnswerverifiedBuyers wil...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Opponents of the minimum wage point out that the minimum wage

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When a binding price ceiling is imposed on a market,

Correct AnswerverifiedShow Answer

Table 6-6 -Refer to Table 6-6. If the government set a price ceiling at $4, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedA price ceiling set at $4 woul...View AnswerShow Answer

Figure 6-25 -Refer to Figure 6-25. The price that buyers pay after the tax is imposed is

Correct AnswerverifiedShow Answer

An alternative to rent-control laws that would not reduce the quantity of housing supplied is

Correct AnswerverifiedShow Answer

A tax imposed on the sellers of a good will lower the

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Buyers wil...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A price ceiling set at $4 woul...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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