Question 1

Table 6-5
 
-Refer to Table 6-5. Which of the following price floors would be binding in this market?

Accepted Answer

A)   $3
B)   $6
C)   $9
D)   None of the above price floors would be binding.E) All of the above
F) A) and C)

Question 2

Table 6-2
 
-Refer to Table 6-2. A price floor set at $5 will

Accepted Answer

A)   be binding and will result in a surplus of 50 units.
B)   be binding and will result in a surplus of 250 units.
C)   be binding and will result in a surplus of 300 units.
D)   not be binding.E) A) and C)
F) A) and B)

Question 3

A price floor is

Accepted Answer

A)   a legal minimum on the price at which a good can be sold.
B)   often imposed when sellers of a good are successful in their attempts to convince the government that the market outcome is unfair without a price floor.
C)   a source of inefficiency in a market.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 4

FICA is an example of a payroll tax, which is a tax on the wages that firms pay their workers.

Accepted Answer

A) True 
 B)False

Question 5

If a price ceiling is a binding constraint on a market, then

Accepted Answer

A)   the equilibrium price must be below the price ceiling.
B)   the quantity supplied must exceed the quantity demanded.
C)   sellers cannot sell all they want to sell at the price ceiling.
D)   buyers cannot buy all they want to buy at the price ceiling.E) None of the above
F) C) and D)

Question 6

A $1.50 tax levied on the buyers of pomegranate juice will shift the demand curve

Accepted Answer

A)   upward by exactly $1.50.
B)   upward by less than $1.50.
C)   downward by exactly $1.50.
D)   downward by less than $1.50.E) B) and D)
F) C) and D)

Question 7

A tax of $1 on buyers always decreases the equilibrium price by $1.

Accepted Answer

A) True 
 B)False

Question 8

Suppose the equilibrium price of a physical examination ("physical")  by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling, the

Accepted Answer

A)   demand curve for physicals shifts to the right.
B)   supply curve for physicals shifts to the left.
C)   quantity demanded of physicals increases, and the quantity supplied of physicals decreases.
D)   number of physicals performed stays the same.E) A) and C)
F) A) and B)

Question 9

Other than OPEC, the shortage of gasoline in the U.S. in the 1970s could also be blamed on

Accepted Answer

A)   a sharp increase in the demand for gasoline that was brought on by the Vietnam War.
B)   the government's policy of maintaining a price ceiling on gasoline.
C)   an indifference among U.S. consumers toward conservation.
D)   the lack of substitutes for crude oil.E) B) and D)
F) All of the above

Question 10

Buyers of a good bear the larger share of the tax burden when the (i)  supply is more elastic than the demand for the product.
(ii)  demand in more elastic than the supply for the product.
(iii)  tax is placed on the sellers of the product.
(iv)  tax is placed on the buyers of the product.

Accepted Answer

A)   (i)  only
B)   (ii)  only
C)   (i)  and (iii)  only
D)   (i)  and (iv)  onlyE) None of the above
F) A) and C)

Question 11

If a price floor is a binding constraint on a market, then

Accepted Answer

A)   the equilibrium price must be above the price floor.
B)   the quantity demanded must exceed the quantity supplied.
C)   sellers cannot sell all they want to sell at the price floor.
D)   buyers cannot buy all they want to buy at the price floor.E) None of the above
F) B) and D)

Question 12

The proportion of minimum-wage earners who are in families with incomes below the poverty line is

Accepted Answer

A)   less than one-third.
B)   between one-third and one-half.
C)   between one-half and two-thirds.
D)   greater than two-thirds.E) B) and C)
F) None of the above

Question 13

Figure 6-22 
-Refer to Figure 6-22. How much tax revenue does this tax generate for the government?

Accepted Answer

A)   $60.
B)   $80.
C)   $15.
D)   $45.E) A) and B)
F) A) and C)

Question 14

If a tax is imposed on the buyers of a product, then the tax burden will fall entirely on the buyers.

Accepted Answer

A) True 
 B)False

Question 15

Figure 6-13
This figure shows the market demand and market supply curves for good X. 
-Refer to Figure 6-13. Which of the following statements is correct?

Accepted Answer

A)   A price ceiling set at $6 would be binding, but a price ceiling set at $4 would not be binding.
B)   A price floor set at $4 would be binding, but a price ceiling set at $4 would not be binding.
C)   A price ceiling set at $3.50 would result in a surplus.
D)   A price floor set at $6.50 would result in a surplus.E) A) and D)
F) All of the above

Question 16

Figure 6-36 
-Refer to Figure 6-36. If the government places a $2 tax in the market, the buyer pays $6.

Accepted Answer

A) True 
 B)False

Question 17

Figure 6-22 
-Refer to Figure 6-22. The equilibrium price in the market before the tax is imposed is

Accepted Answer

A)   $3.50.
B)   $5.00.
C)   $2.00.
D)   $1.50.E) A) and B)
F) None of the above

Question 18

Figure 6-23
 
-Refer to Figure 6-23. How much tax revenue does this tax produce for the government?

Accepted Answer

A)   $18.
B)   $30.
C)   $6.
D)   $36.E) A) and C)
F) A) and B)

Question 19

Figure 6-20 
-Refer to Figure 6-20. Suppose a tax of $5 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

Accepted Answer

A)   less than 25 units
B)   25 units
C)   between 25 units and 50 units
D)   greater than 50 unitsE) B) and C)
F) A) and C)

Question 20

Figure 6-9 
-Refer to Figure 6-9. A price floor set at

Accepted Answer

A)   $4 will be binding and will result in a shortage of 8 units.
B)   $4 will be binding and will result in a shortage of 16 units.
C)   $7 will be binding and will result in a surplus of 4 units.
D)   $7 will be binding and will result in a surplus of 8 units.E) B) and D)
F) A) and B)

Exam 6: Supply, Demand, and Government Policies

A $1.50 tax levied on the buyers of pomegranate juice will shift the demand curve

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A price floor is

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Figure 6-9 -Refer to Figure 6-9. A price floor set at

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Figure 6-20 -Refer to Figure 6-20. Suppose a tax of $5 per unit is imposed on this market. What will be the new equilibrium quantity in this market?

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Table 6-2 -Refer to Table 6-2. A price floor set at $5 will

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If a price floor is a binding constraint on a market, then

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Table 6-5 -Refer to Table 6-5. Which of the following price floors would be binding in this market?

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Figure 6-36 -Refer to Figure 6-36. If the government places a $2 tax in the market, the buyer pays $6.

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Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. Which of the following statements is correct?

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Figure 6-23 -Refer to Figure 6-23. How much tax revenue does this tax produce for the government?

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If a tax is imposed on the buyers of a product, then the tax burden will fall entirely on the buyers.

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FICA is an example of a payroll tax, which is a tax on the wages that firms pay their workers.

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Buyers of a good bear the larger share of the tax burden when the (i) supply is more elastic than the demand for the product. (ii) demand in more elastic than the supply for the product. (iii) tax is placed on the sellers of the product. (iv) tax is placed on the buyers of the product.

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If a price ceiling is a binding constraint on a market, then

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A tax of $1 on buyers always decreases the equilibrium price by $1.

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Figure 6-22 -Refer to Figure 6-22. The equilibrium price in the market before the tax is imposed is

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Figure 6-22 -Refer to Figure 6-22. How much tax revenue does this tax generate for the government?

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Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling, the

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The proportion of minimum-wage earners who are in families with incomes below the poverty line is

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Other than OPEC, the shortage of gasoline in the U.S. in the 1970s could also be blamed on

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