Question 1

When a tax of $1.00 per gallon is imposed on sellers of gasoline,the supply curve for gasoline shifts upward,but by less than $1.00.

Accepted Answer

A) True 
 B)False

Question 2

When a binding price floor is imposed on a market to benefit sellers,

Accepted Answer

A)   every seller in the market benefits.
B)   all buyers and sellers benefit.
C)   every seller who wants to sell the good will be able to do so,but only if he appeals to the personal biases of the buyers.
D)   some sellers will not be able to sell any amount of the good.E) None of the above
F) A) and B)

Question 3

If the equilibrium wage is $4 per hour and the minimum wage is $5.15 per hour,then a shortage of labor will exist.

Accepted Answer

A) True 
 B)False

Question 4

When a tax is levied on sellers of tea,

Accepted Answer

A)   the well-being of both sellers and buyers of tea is unaffected.
B)   sellers of tea are made worse off,and the well-being of buyers is unaffected.
C)   sellers of tea are made worse off,and buyers of tea are made better off.
D)   both sellers and buyers of tea are made worse off.E) None of the above
F) A) and C)

Question 5

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) B) and C)
F) None of the above

Question 6

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) None of the above

Question 7

Figure 6-2
This figure shows the market demand and market supply curves for good X. 
-Refer to Figure 6-2.If the government imposes a price floor of $7 on this market,then there will be

Accepted Answer

A)   no surplus.
B)   a surplus of 10 units.
C)   a surplus of 15 units.
D)   a surplus of 20 units.E) A) and D)
F) A) and C)

Question 8

Figure 6-24
Suppose the government imposes a $2 on this market. 
-Refer to Figure 6-24.The buyers and sellers will bear an eaqual share of the tax burden if the demand is

Accepted Answer

A)   D1,and the supply is S1.
B)   D2,and the supply is S1.
C)   D1,and the supply is S2.
D)   D2,and the supply is S2.E) None of the above
F) All of the above

Question 9

Figure 6-20 
-Refer to Figure 6-20.Suppose sellers,rather than buyers,were required to pay this tax (in the same amount per unit as shown in the graph) .Relative to the tax on buyers,the tax on sellers would result in

Accepted Answer

A)   buyers bearing the same share of the tax burden.
B)   sellers bearing the same share of the tax burden.
C)   the same amount of tax revenue for the government.
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 10

Figure 6-18 
-Refer to Figure 6-18.The equilibrium price in the market before the tax is imposed is

Accepted Answer

A)   $3.50.
B)   $5.
C)   $6.
D)   $7.E) C) and D)
F) A) and D)

Question 11

A binding minimum wage creates a shortage of labor.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A)   and the effective price received by sellers both increase.
B)   increases,but the effective price received by sellers decreases.
C)   decreases,but the effective price received by sellers increases.
D)   and the effective price received by sellers both decrease.E) A) and B)
F) None of the above

Question 13

Suppose sellers of liquor are required to send $1.00 to the government for every bottle of liquor they sell.Further,suppose this tax causes the price paid by buyers of liquor to rise by $0.80 per bottle.Which of the following statements is correct?

Accepted Answer

A)   This tax causes the supply curve for liquor to shift upward by $1.00 at each quantity of liquor.
B)   The effective price received by sellers is $0.20 per bottle less than it was before the tax.
C)   Eighty percent of the burden of the tax falls on buyers.
D)   All of the above are correct.E) B) and C)
F) None of the above

Question 14

Which of the following is correct?

Accepted Answer

A)   Workers determine the supply of labor,and firms determine the demand for labor.
B)   Workers determine the demand for labor,and firms determine the supply of labor.
C)   The labor market is a single market for all different types of workers.
D)   The price of the product produced by labor adjusts to balance the supply of labor and the demand for labor.E) A) and B)
F) A) and C)

Question 15

One common example of a price floor is the minimum wage.

Accepted Answer

A) True 
 B)False

Question 16

Define a price floor.

Accepted Answer

A price floor is a l...

Question 17

Although lawmakers legislated a fifty-fifty division of the payment of the FICA tax,

Accepted Answer

A)   the actual tax incidence is unaffected by the legislated tax incidence.
B)   the employer now is required by law to pay more than 50 percent of the tax.
C)   the employee now is required by law to pay more than 50 percent of the tax.
D)   employers are no longer required by law to pay any portion of the tax.E) B) and C)
F) B) and D)

Question 18

When a free market for a good reaches equilibrium,anyone who is willing and able to pay the market price can buy the good.

Accepted Answer

A) True 
 B)False

Question 19

Suppose that a tax is placed on books.If the sellers pay the majority of the tax,then we know that the

Accepted Answer

A)   demand is more inelastic than the supply.
B)   supply is more inelastic than the demand.
C)   government has required that buyers remit the tax payments.
D)   government has required that sellers remit the tax payments.E) B) and D)
F) B) and C)

Question 20

Price controls are usually enacted when policymakers believe that the market price of a good or service is unfair to buyers or sellers.

Accepted Answer

A) True 
 B)False

Exam 6: Supply,demand,and Government Policies

A binding minimum wage creates a shortage of labor.

Correct AnswerverifiedShow Answer

Suppose that a tax is placed on books.If the sellers pay the majority of the tax,then we know that the

Correct AnswerverifiedShow Answer

Figure 6-20 -Refer to Figure 6-20.Suppose sellers,rather than buyers,were required to pay this tax (in the same amount per unit as shown in the graph) .Relative to the tax on buyers,the tax on sellers would result in

Correct AnswerverifiedShow Answer

Price controls are usually enacted when policymakers believe that the market price of a good or service is unfair to buyers or sellers.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-2 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-2.If the government imposes a price floor of $7 on this market,then there will be

Correct AnswerverifiedShow Answer

Figure 6-24 Suppose the government imposes a $2 on this market. -Refer to Figure 6-24.The buyers and sellers will bear an eaqual share of the tax burden if the demand is

Correct AnswerverifiedShow Answer

Figure 6-18 -Refer to Figure 6-18.The equilibrium price in the market before the tax is imposed is

Correct AnswerverifiedShow Answer

Suppose sellers of liquor are required to send $1.00 to the government for every bottle of liquor they sell.Further,suppose this tax causes the price paid by buyers of liquor to rise by $0.80 per bottle.Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

When a tax is levied on sellers of tea,

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

If the equilibrium wage is $4 per hour and the minimum wage is $5.15 per hour,then a shortage of labor will exist.

Correct AnswerverifiedShow Answer

When a free market for a good reaches equilibrium,anyone who is willing and able to pay the market price can buy the good.

Correct AnswerverifiedShow Answer

When a binding price floor is imposed on a market to benefit sellers,

Correct AnswerverifiedShow Answer

When a tax of $1.00 per gallon is imposed on sellers of gasoline,the supply curve for gasoline shifts upward,but by less than $1.00.

Correct AnswerverifiedShow Answer

One common example of a price floor is the minimum wage.

Correct AnswerverifiedShow Answer

Although lawmakers legislated a fifty-fifty division of the payment of the FICA tax,

Correct AnswerverifiedShow Answer

Define a price floor.

Correct AnswerverifiedA price floor is a l...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A price floor is a l...
View Answer