Question 1

Economists argue that rent control is a highly efficient way to help the poor raise their standard of living.

Accepted Answer

A) True 
 B)False

Question 2

A tax on buyers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

Accepted Answer

A) True 
 B)False

Question 3

Table 6-3
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 $2 above the equilibrium price in this market. 
-Refer to Table 6-3. Following the imposition of a price floor $2 above the equilibrium price, irate buyers convince Congress to repeal the price floor and to impose a price ceiling $1 below the former price floor. The resulting market price is

Accepted Answer

A)   $2.
B)   $3.
C)   $4.
D)   $5.E) All of the above
F) B) and C)

Question 4

A tax imposed on the sellers of a good will

Accepted Answer

A)   raise both the price buyers pay and the effective price sellers receive.
B)   raise the price buyers pay and lower the effective price sellers receive.
C)   lower the price buyers pay and raise the effective price sellers receive.
D)   lower both the price buyers pay and the effective price sellers receive.E) A) and B)
F) None of the above

Question 5

A tax on a market with elastic demand and elastic supply will shrink the market more than a tax on a market with inelastic demand and inelastic supply will shrink the market.

Accepted Answer

A) True 
 B)False

Question 6

A minimum wage that is set below a market's equilibrium wage will

Accepted Answer

A)   result in an excess demand for labor, that is, unemployment.
B)   result in an excess demand for labor, that is, a shortage of workers.
C)   result in an excess supply of labor, that is, unemployment.
D)   have no impact on employment.E) All of the above
F) B) and D)

Question 7

A tax imposed on the buyers of a good will

Accepted Answer

A)   raise both the price buyers pay and the effective price sellers receive.
B)   raise the price buyers pay and lower the effective price sellers receive.
C)   lower the price buyers pay and raise the effective price sellers receive.
D)   lower both the price buyers pay and the effective price sellers receive.E) A) and B)
F) B) and C)

Question 8

Under rent control, tenants can expect

Accepted Answer

A)   lower rent and higher quality housing.
B)   lower rent and lower quality housing.
C)   higher rent and a shortage of rental housing.
D)   higher rent and a surplus of rental housing.E) B) and C)
F) A) and D)

Question 9

In an unregulated labor market, the wage adjusts to balance labor supply and labor demand.

Accepted Answer

A) True 
 B)False

Question 10

Table 6-5 
-Refer to Table 6-5. Suppose the government imposes a price ceiling of $3 on this market. What will be the size of the shortage in this market?

Accepted Answer

A)   0 units
B)   30 units
C)   45 units
D)   75 unitsE) All of the above
F) B) and C)

Question 11

Suppose that in a particular market, the supply curve is highly elastic and the demand curve is highly inelastic. If a tax is imposed in this market, then the

Accepted Answer

A)   buyers will bear a greater burden of the tax than the sellers.
B)   sellers will bear a greater burden of the tax than the buyers.
C)   buyers and sellers are likely to share the burden of the tax equally.
D)   buyers and sellers will not share the burden equally, but it is impossible to determine who will bear the greater burden of the tax without more information.E) A) and B)
F) A) and C)

Question 12

If a nonbinding price ceiling is imposed on a market, then the

Accepted Answer

A)   quantity sold in the market will decrease.
B)   quantity sold in the market will stay the same.
C)   price in the market will increase.
D)   price in the market will decrease.E) A) and D)
F) B) and C)

Question 13

Which of the following is the most likely explanation for the imposition of a price floor on the market for corn?

Accepted Answer

A)   Policymakers have studied the effects of the price floor carefully, and they recognize that the price floor is advantageous for society as a whole.
B)   Buyers and sellers of corn have agreed that the price floor is good for both of them and have therefore pressured policy makers into imposing the price floor.
C)   Buyers of corn, recognizing that the price floor is good for them, have pressured policymakers into imposing the price floor.
D)   Sellers of corn, recognizing that the price floor is good for them, have pressured policymakers into imposing the price floor.E) B) and D)
F) B) and C)

Question 14

Figure 6-5 
-Refer to Figure 6-5. If government imposes a price floor at $9, then the price floor causes

Accepted Answer

A)   quantity demanded to decrease by 40 units.
B)   quantity supplied to increase by 20 units.
C)   a surplus of 60 units.
D)   All of the above are correct.E) C) and D)
F) None of the above

Question 15

Figure 6-4 
-Refer to Figure 6-4. A government-imposed price floor of $12 in this market results in

Accepted Answer

A)   a surplus of 2 units.
B)   a surplus of 4 units.
C)   12 units sold.
D)   10 units sold.E) A) and B)
F) B) and C)

Question 16

If a binding price floor is imposed on the market for eBooks, then

Accepted Answer

A)   the demand for eBooks will decrease.
B)   the supply of eBooks will increase.
C)   a surplus of eBooks will develop.
D)   All of the above are correct.E) None of the above
F) All of the above

Question 17

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) A) and D)
F) All of the above

Question 18

When OPEC raised the price of crude oil in the 1970s, it caused the

Accepted Answer

A)   demand for gasoline to increase.
B)   demand for gasoline to decrease.
C)   supply of gasoline to increase.
D)   supply of gasoline to decrease.E) B) and C)
F) All of the above

Question 19

An outcome that can result from either a price ceiling or a price floor is

Accepted Answer

A)   an enhancement of efficiency.
B)   undesirable rationing mechanisms.
C)   a surplus.
D)   a shortage.E) B) and C)
F) A) and D)

Question 20

A binding price ceiling causes quantity demanded to be less than quantity supplied.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

A tax on buyers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

Correct Answer
verified

Table 6-5 -Refer to Table 6-5. Suppose the government imposes a price ceiling of $3 on this market. What will be the size of the shortage in this market?

Correct Answer
verified

Figure 6-5 -Refer to Figure 6-5. If government imposes a price floor at $9, then the price floor causes

Correct Answer
verified

If a nonbinding price ceiling is imposed on a market, then the

Correct Answer
verified

Economists argue that rent control is a highly efficient way to help the poor raise their standard of living.

Correct Answer
verified

A tax imposed on the sellers of a good will

Correct Answer
verified

Under rent control, tenants can expect

Correct Answer
verified

Which of the following is the most likely explanation for the imposition of a price floor on the market for corn?

Correct Answer
verified

A tax imposed on the buyers of a good will

Correct Answer
verified

A minimum wage that is set below a market's equilibrium wage will

Correct Answer
verified

A binding price ceiling causes quantity demanded to be less than quantity supplied.

Correct Answer
verified

A tax on a market with elastic demand and elastic supply will shrink the market more than a tax on a market with inelastic demand and inelastic supply will shrink the market.

Correct Answer
verified

In an unregulated labor market, the wage adjusts to balance labor supply and labor demand.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

If a binding price floor is imposed on the market for eBooks, then

Correct Answer
verified

An outcome that can result from either a price ceiling or a price floor is

Correct Answer
verified

Figure 6-4 -Refer to Figure 6-4. A government-imposed price floor of $12 in this market results in

Correct Answer
verified

When OPEC raised the price of crude oil in the 1970s, it caused the

Correct Answer
verified

Suppose that in a particular market, the supply curve is highly elastic and the demand curve is highly inelastic. If a tax is imposed in this market, then the

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

A tax on buyers usually causes buyers to pay more for the good and sellers to receive less for the good than they did before the tax was levied.

Correct AnswerverifiedShow Answer

Table 6-5 -Refer to Table 6-5. Suppose the government imposes a price ceiling of $3 on this market. What will be the size of the shortage in this market?

Correct AnswerverifiedShow Answer

Figure 6-5 -Refer to Figure 6-5. If government imposes a price floor at $9, then the price floor causes

Correct AnswerverifiedShow Answer

If a nonbinding price ceiling is imposed on a market, then the

Correct AnswerverifiedShow Answer

Economists argue that rent control is a highly efficient way to help the poor raise their standard of living.

Correct AnswerverifiedShow Answer

A tax imposed on the sellers of a good will

Correct AnswerverifiedShow Answer

Under rent control, tenants can expect

Correct AnswerverifiedShow Answer

Which of the following is the most likely explanation for the imposition of a price floor on the market for corn?

Correct AnswerverifiedShow Answer

A tax imposed on the buyers of a good will

Correct AnswerverifiedShow Answer

A minimum wage that is set below a market's equilibrium wage will

Correct AnswerverifiedShow Answer

A binding price ceiling causes quantity demanded to be less than quantity supplied.

Correct AnswerverifiedShow Answer

A tax on a market with elastic demand and elastic supply will shrink the market more than a tax on a market with inelastic demand and inelastic supply will shrink the market.

Correct AnswerverifiedShow Answer

In an unregulated labor market, the wage adjusts to balance labor supply and labor demand.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If a binding price floor is imposed on the market for eBooks, then

Correct AnswerverifiedShow Answer

An outcome that can result from either a price ceiling or a price floor is

Correct AnswerverifiedShow Answer

Figure 6-4 -Refer to Figure 6-4. A government-imposed price floor of $12 in this market results in

Correct AnswerverifiedShow Answer

When OPEC raised the price of crude oil in the 1970s, it caused the

Correct AnswerverifiedShow Answer

Suppose that in a particular market, the supply curve is highly elastic and the demand curve is highly inelastic. If a tax is imposed in this market, then the

Correct AnswerverifiedShow Answer

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