Question 1

Scenario 6-1
Suppose that demand in the market for good X is given by the equation  and that supply in the market for good X is given by the equation 
-Refer to Scenario 6-1.If the government set a price ceiling at $12,would there be a shortage or surplus,and how large would be the shortage/surplus?

Accepted Answer

A price ceiling set ...

Question 2

A binding price ceiling causes a shortage in the market.

Accepted Answer

A) True 
 B)False

Question 3

The quantity sold in a market will decrease if the government

Accepted Answer

A)   decreases a binding price floor in that market.
B)   increases a binding price ceiling in that market.
C)   increases a tax on the good sold in that market.
D)   All of the above are correct.E) B) and D)
F) A) and D)

Question 4

Price floors are typically imposed to benefit sellers.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following causes a shortage of a good?

Accepted Answer

A)   a binding price floor
B)   a binding price ceiling
C)   a tax on the good
D)   None of the above is correct.E) A) and B)
F) All of the above

Question 6

If the minimum wage exceeds the equilibrium wage,then

Accepted Answer

A)   the quantity demanded of labor will exceed the quantity supplied.
B)   the quantity supplied of labor will exceed the quantity demanded.
C)   the minimum wage will not be binding.
D)   there will be no unemployment.E) A) and C)
F) None of the above

Question 7

The goal of rent control is to help the poor by making housing more affordable.

Accepted Answer

A) True 
 B)False

Question 8

A tax on the sellers of coffee mugs

Accepted Answer

A)   increases the size of the coffee mug market.
B)   decreases the size of the coffee mug market.
C)   has no effect on the size of the coffee mug market.
D)   may increase,decrease,or have no effect on the size of the coffee mug market.E) A) and D)
F) All of the above

Question 9

Figure 6-15 
-Refer to Figure 6-15.Suppose a tax of $2 per unit is imposed on this market.What will be the new equilibrium quantity in this market?

Accepted Answer

A)   less than 50 units
B)   50 units
C)   between 50 units and 100 units
D)   greater than 100 unitsE) None of the above
F) B) and D)

Question 10

If a price floor is not binding,then

Accepted Answer

A)   the equilibrium price is above the price floor.
B)   the equilibrium price is below the price floor.
C)   there will be a surplus in the market.
D)   Both a and c are correct.E) C) and D)
F) B) and D)

Question 11

Economists blame the long lines at gasoline stations in the U.S.in the 1970s on

Accepted Answer

A)   U.S.government regulations pertaining to the price of gasoline.
B)   the Organization of Petroleum Exporting Countries (OPE
C)  .
C)   major oil companies operating in the U.S.
D)   consumers who bought gasoline frequently,even when their cars' gasoline tanks were nearly full.E) A) and D)
F) C) and D)

Question 12

Figure 6-4 
-Refer to Figure 6-4.If the government set a price ceiling at $15,would there be a shortage or surplus,and how large would be the shortage/surplus?

Accepted Answer

A price ceiling set ...

Question 13

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 B)
F) None of the above

Question 14

Which of the following is not a rationing mechanism used by landlords in cities with rent control?

Accepted Answer

A)   waiting lists
B)   race
C)   price
D)   bribesE) A) and B)
F) None of the above

Question 15

Figure 6-16 
-Refer to Figure 6-16.Suppose a tax of $5 per unit is imposed on this market.How much will buyers pay per unit after the tax is imposed?

Accepted Answer

A)   $5
B)   between $5 and $10
C)   between $10 and $14
D)   $14E) A) and C)
F) None of the above

Question 16

If a binding price floor is imposed on the video game market,then

Accepted Answer

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

Question 17

Figure 6-3

-Refer to Figure 6-3.In panel (a) ,there will be

Accepted Answer

A)   a shortage of wheat.
B)   equilibrium in the market.
C)   a surplus of wheat.
D)   lines of people waiting to buy wheat.E) C) and D)
F) B) and D)

Question 18

When a tax is placed on the buyers of cell phones,the size of the cell phone market

Accepted Answer

A)   and the effective price received by sellers both decrease.
B)   decreases,but the effective price received by sellers increases.
C)   increases,but the effective price received by sellers decreases.
D)   and the effective price received by sellers both increase.E) All of the above
F) C) and D)

Question 19

Figure 6-26 
-Refer to Figure 6-26.A price floor set at $40 would create a surplus of 20 units.

Accepted Answer

A) True 
 B)False

Question 20

To be binding,a price floor must be set above the equilibrium price.

Accepted Answer

A) True 
 B)False

Exam 6: Supply,demand,and Government Policies

When a tax is placed on the buyers of cell phones,the size of the cell phone market

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

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Figure 6-3 -Refer to Figure 6-3.In panel (a) ,there will be

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Scenario 6-1 Suppose that demand in the market for good X is given by the equation and that supply in the market for good X is given by the equation -Refer to Scenario 6-1.If the government set a price ceiling at $12,would there be a shortage or surplus,and how large would be the shortage/surplus?

Correct AnswerverifiedA price ceiling set ...View AnswerShow Answer

Which of the following is not a rationing mechanism used by landlords in cities with rent control?

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Price floors are typically imposed to benefit sellers.

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Figure 6-15 -Refer to Figure 6-15.Suppose a tax of $2 per unit is imposed on this market.What will be the new equilibrium quantity in this market?

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A binding price ceiling causes a shortage in the market.

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The quantity sold in a market will decrease if the government

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Economists blame the long lines at gasoline stations in the U.S.in the 1970s on

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If a price floor is not binding,then

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Figure 6-4 -Refer to Figure 6-4.If the government set a price ceiling at $15,would there be a shortage or surplus,and how large would be the shortage/surplus?

Correct AnswerverifiedA price ceiling set ...View AnswerShow Answer

Figure 6-16 -Refer to Figure 6-16.Suppose a tax of $5 per unit is imposed on this market.How much will buyers pay per unit after the tax is imposed?

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To be binding,a price floor must be set above the equilibrium price.

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A tax on the sellers of coffee mugs

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If a binding price floor is imposed on the video game market,then

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Which of the following causes a shortage of a good?

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The goal of rent control is to help the poor by making housing more affordable.

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Figure 6-26 -Refer to Figure 6-26.A price floor set at $40 would create a surplus of 20 units.

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If the minimum wage exceeds the equilibrium wage,then

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A price ceiling set ...
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A price ceiling set ...
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