Question 1

Figure 6-17
This figure shows the market demand and market supply curves for good Y 
-Refer to Figure 6-17. A government-imposed price of $24 in this market is an example of a

Accepted Answer

A)  binding price ceiling that creates a shortage.
B)  non-binding price ceiling that creates a shortage.
C)  binding price floor that creates a surplus.
D)  non-binding price floor that creates a surplus.E) C) and D)
F) A) and D)

Question 2

The incidence of a tax falls more heavily on

Accepted Answer

A)  consumers than producers if demand is more inelastic than supply.
B)  producers than consumers if supply is more inelastic than demand.
C)  consumers than producers if supply is more elastic than demand.
D)  All of the above are correct.E) B) and D)
F) A) and C)

Question 3

A price ceiling is a legal minimum on the price at which a good or service can be sold.

Accepted Answer

A) True 
 B)False

Question 4

Suppose that the demand for digital cameras is elastic, and the supply of digital cameras is inelastic. A tax of $20 per camera levied on digital cameras will decrease the effective price received by sellers of digital cameras by

Accepted Answer

A)  less than $10.
B)  $10.
C)  between $10 and $20.
D)  $20.E) A) and B)
F) All of the above

Question 5

Figure 6-8 
-Refer to Figure 6-8. The price of the good would continue to serve as the rationing mechanism if

Accepted Answer

A)  a price ceiling of $3 is imposed.
B)  a price ceiling of $5 is imposed.
C)  a price floor of $5 is imposed.
D)  All of the above are correct.E) C) and D)
F) B) and C)

Question 6

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

Accepted Answer

A)  no surplus.
B)  a surplus of 20 units.
C)  a surplus of 30 units.
D)  a surplus of 40 units.E) None of the above
F) A) and D)

Question 7

One common example of a price ceiling is rent control.

Accepted Answer

A) True 
 B)False

Question 8

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 9

​Figure 6-33
The diagram shows the effect of a tax as measured by the distance between J and K. 
-Refer to Figure 6-33. Based upon the diagram,

Accepted Answer

A)  ​the incidence of the tax falls more heavily on buyers.
B)  ​the incidence of the tax falls more heavily on sellers.
C)  ​the incidence of the tax is shared equally by both buyers and sellers.
D)  ​the incidence of the tax cannot be determined based upon the information in the diagram.E) A) and D)
F) A) and B)

Question 10

Which of the following is not correct?

Accepted Answer

A)  The economy contains many labor markets for different types of workers.
B)  The impact of the minimum wage depends on the skill and experience of the worker.
C)  The minimum wage is binding for workers with high skills and much experience.
D)  The minimum wage is not binding when the equilibrium wage is above the minimum wage.E) C) and D)
F) A) and B)

Question 11

Suppose the government imposes a $40 tax on the buyers of refrigerators. The tax would

Accepted Answer

A)  shift the demand curve downward by less than $40.
B)  raise the equilibrium price by $40.
C)  create a $20 tax burden each for buyers and sellers.
D)  discourage market activity.E) C) and D)
F) B) and D)

Question 12

When a price ceiling is binding, is the price ceiling set above or below the market equilibrium price?

Accepted Answer

A binding price ceil...

Question 13

The quantity sold in a market will decrease if the government decreases a

Accepted Answer

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

Question 14

Under rent control, landlords cease to be responsive to tenants' concerns about the quality of the housing because

Accepted Answer

A)  with rent control, the government guarantees landlords a minimum level of profit.
B)  they become resigned to the fact that many of their apartments are going to be vacant at any given time.
C)  with shortages and waiting lists, they have no incentive to maintain and improve their property.
D)  with rent control, it becomes the government's responsibility to maintain rental housing.E) A) and D)
F) A) and C)

Question 15

Table 6-1 
-Refer to Table 6-1. Which of the following price ceilings would be binding in this market?

Accepted Answer

A)  $80
B)  $70
C)  $60
D)  $50E) B) and D)
F) A) and D)

Question 16

If the demand curve is very elastic and the supply curve is very inelastic in a market, then the sellers will bear a greater burden of a tax imposed on the market, even if the tax is imposed on the buyers.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

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) B) and C)
F) A) and C)

Question 20

Figure 6-15 
-Refer to Figure 6-15. For a price ceiling to be binding in this market, it would have to be set at

Accepted Answer

A)  any price below $3.
B)  a price between $2 and $3.
C)  a price between $3 and $4.
D)  any price above $3.E) B) and C)
F) All of the above

Exam 6: Supply, Demand, and Government Policies

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

Correct Answer
verified

Figure 6-8 -Refer to Figure 6-8. The price of the good would continue to serve as the rationing mechanism if

Correct Answer
verified

When a price ceiling is binding, is the price ceiling set above or below the market equilibrium price?

Correct Answer
verified
A binding price ceil...
View Answer

Table 6-1 -Refer to Table 6-1. Which of the following price ceilings would be binding in this market?

Correct Answer
verified

Suppose that the demand for digital cameras is elastic, and the supply of digital cameras is inelastic. A tax of $20 per camera levied on digital cameras will decrease the effective price received by sellers of digital cameras by

Correct Answer
verified

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

Correct Answer
verified

A price ceiling is a legal minimum on the price at which a good or service can be sold.

Correct Answer
verified

Suppose the government imposes a $40 tax on the buyers of refrigerators. The tax would

Correct Answer
verified

Under rent control, landlords cease to be responsive to tenants' concerns about the quality of the housing because

Correct Answer
verified

One common example of a price ceiling is rent control.

Correct Answer
verified

Figure 6-15 -Refer to Figure 6-15. For a price ceiling to be binding in this market, it would have to be set at

Correct Answer
verified

Figure 6-17 This figure shows the market demand and market supply curves for good Y -Refer to Figure 6-17. A government-imposed price of $24 in this market is an example of a

Correct Answer
verified

Which of the following is not correct?

Correct Answer
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If the demand curve is very elastic and the supply curve is very inelastic in a market, then the sellers will bear a greater burden of a tax imposed on the market, even if the tax is imposed on the buyers.

Correct Answer
verified

Correct Answer
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The incidence of a tax falls more heavily on

Correct Answer
verified

The quantity sold in a market will decrease if the government decreases a

Correct Answer
verified

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

Correct Answer
verified

Figure 6-33 The diagram shows the effect of a tax as measured by the distance between J and K. -Refer to Figure 6-33. Based upon the diagram,

Correct Answer
verified

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

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

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

Correct AnswerverifiedShow Answer

Figure 6-8 -Refer to Figure 6-8. The price of the good would continue to serve as the rationing mechanism if

Correct AnswerverifiedShow Answer

When a price ceiling is binding, is the price ceiling set above or below the market equilibrium price?

Correct AnswerverifiedA binding price ceil...View AnswerShow Answer

Table 6-1 -Refer to Table 6-1. Which of the following price ceilings would be binding in this market?

Correct AnswerverifiedShow Answer

Suppose that the demand for digital cameras is elastic, and the supply of digital cameras is inelastic. A tax of $20 per camera levied on digital cameras will decrease the effective price received by sellers of digital cameras by

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A price ceiling is a legal minimum on the price at which a good or service can be sold.

Correct AnswerverifiedShow Answer

Suppose the government imposes a $40 tax on the buyers of refrigerators. The tax would

Correct AnswerverifiedShow Answer

Under rent control, landlords cease to be responsive to tenants' concerns about the quality of the housing because

Correct AnswerverifiedShow Answer

One common example of a price ceiling is rent control.

Correct AnswerverifiedShow Answer

Figure 6-15 -Refer to Figure 6-15. For a price ceiling to be binding in this market, it would have to be set at

Correct AnswerverifiedShow Answer

Figure 6-17 This figure shows the market demand and market supply curves for good Y -Refer to Figure 6-17. A government-imposed price of $24 in this market is an example of a

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

If the demand curve is very elastic and the supply curve is very inelastic in a market, then the sellers will bear a greater burden of a tax imposed on the market, even if the tax is imposed on the buyers.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The incidence of a tax falls more heavily on

Correct AnswerverifiedShow Answer

The quantity sold in a market will decrease if the government decreases a

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

​Figure 6-33 The diagram shows the effect of a tax as measured by the distance between J and K. -Refer to Figure 6-33. Based upon the diagram,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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Correct Answer
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A binding price ceil...
View Answer

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Figure 6-33 The diagram shows the effect of a tax as measured by the distance between J and K. -Refer to Figure 6-33. Based upon the diagram,

Correct Answer
verified

Correct Answer
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