Question 1

​Figure 6-32 
-​Refer to Figure 6-32. Which of the following statements is NOT accurate regarding the situation reflected by this diagram?

Accepted Answer

A)  ​the price will reflect the scarcity of the good when a price floor is imposed at a price of $8.
B)  ​the price will reflect the scarcity of the good when a price ceiling is imposed at a price of $10.
C)  ​the price will reflect the scarcity of the good when a price ceiling is imposed at a price of $12.
D)  ​the price will reflect the scarcity of the good when a price floor is imposed at a price of $14.E) A) and B)
F) A) and C)

Question 2

Studies by economists have found that a 10 percent increase in the minimum wage decreases teenage employment 10 percent.

Accepted Answer

A) True 
 B)False

Question 3

Price controls can generate inequities.

Accepted Answer

A) True 
 B)False

Question 4

Figure 6-21 
-Refer to Figure 6-21. What is the amount of the tax per unit?

Accepted Answer

A)  $1
B)  $2
C)  $3
D)  $4E) B) and D)
F) None of the above

Question 5

Table 6-2 
-Refer to Table 6-2. A price ceiling set at $20 will

Accepted Answer

A)  be binding and will result in a shortage of 75 units.
B)  be binding and will result in a shortage of 200 units.
C)  be binding and will result in a shortage of 125 units.
D)  not be binding.E) All of the above
F) B) and C)

Question 6

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

Accepted Answer

A)  $6
B)  $8
C)  $10
D)  $4E) All of the above
F) A) and B)

Question 7

​In a market with a binding price control,

Accepted Answer

A)  there is an imbalance between the quantity supplied by sellers and the quantity demanded by buyers.
B)  ​the costs of production are fully reflected in the price paid.
C)  ​the price observe reflects the scarcity of the good.
D)  ​all of the above are true.E) B) and C)
F) A) and D)

Question 8

Figure 6-7 
-Refer to Figure 6-7. Suppose a price floor of $8 is imposed on this market. As a result,

Accepted Answer

A)  buyers' total expenditure on the good decreases by $20.
B)  the supply curve shifts to the left; quantity sold is now 30 units and the price is $8.
C)  the quantity of the good demanded decreases by 10 units.
D)  the price of the good continues to serve as the rationing mechanism.E) C) and D)
F) None of the above

Question 9

Table 6-1 
-Refer to Table 6-1. Suppose the government imposes a price ceiling of $70 on this market. What will be the size of the shortage in this market?

Accepted Answer

A)  0 units
B)  400 units
C)  600 units
D)  1000 unitsE) None of the above
F) A) and B)

Question 10

Price is the rationing mechanism in a free, competitive market.

Accepted Answer

A) True 
 B)False

Question 11

If the demand curve is more price elastic than the supply curve, will the buyers or the sellers bear a greater burden of a tax? Draw a diagram to illustrate your answer.

Accepted Answer

When the demand curve is more elastic th...

Question 12

Table 6-6 
-Refer to Table 6-6. In this market, over what range of prices would a price floor set by the government be binding?

Accepted Answer

A price floor must be set abov...

Question 13

Figure 6-12 1 to S2, the resulting quantity of gasoline that is bought and sold is A) less than Q3. B) Q3. C) between Q1 and Q3. D) at least Q1." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 6-12. When the price ceiling applies in this market, and the supply curve for gasoline shifts from S1 to S2, the resulting quantity of gasoline that is bought and sold is

Accepted Answer

A)  less than Q3.
B)  Q3.
C)  between Q1 and Q3.
D)  at least Q1.E) A) and B)
F) A) and C)

Question 14

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

Question 15

Figure 6-35 
-Refer to Figure 6-35. A price floor set at $40 would create a surplus of 20 units.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Figure 6-36 
-Refer to Figure 6-36. If the government places a $2 tax in the market, the seller bears $2 of the tax burden.

Accepted Answer

A) True 
 B)False

Question 18

In the housing market, supply and demand are

Accepted Answer

A)  more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the short run than in the long run.
B)  more elastic in the short run than in the long run, and so rent control leads to a larger shortage of apartments in the long run than in the short run.
C)  more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the short run than in the long run.
D)  more elastic in the long run than in the short run, and so rent control leads to a larger shortage of apartments in the long run than in the short run.E) A) and B)
F) C) and D)

Question 19

When a tax is placed on the buyers of a product, buyers pay

Accepted Answer

A)  more and sellers receive more than they did before the tax.
B)  more and sellers receive less than they did before the tax.
C)  less and sellers receive more than they did before the tax.
D)  less and sellers receive less than they did before the tax.E) None of the above
F) C) and D)

Question 20

Figure 6-2 
-Refer to Figure 6-2. The price ceiling causes quantity

Accepted Answer

A)  supplied to exceed quantity demanded by 45 units.
B)  supplied to exceed quantity demanded by 85 units.
C)  demanded to exceed quantity supplied by 45 units.
D)  demanded to exceed quantity supplied by 85 units.E) None of the above
F) B) and C)

Exam 6: Supply, Demand, and Government Policies

Figure 6-12 -Refer to Figure 6-12. When the price ceiling applies in this market, and the supply curve for gasoline shifts from S1 to S2, the resulting quantity of gasoline that is bought and sold is

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Table 6-1 -Refer to Table 6-1. Suppose the government imposes a price ceiling of $70 on this market. What will be the size of the shortage in this market?

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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

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In the housing market, supply and demand are

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Figure 6-35 -Refer to Figure 6-35. A price floor set at $40 would create a surplus of 20 units.

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​Figure 6-32 -​Refer to Figure 6-32. Which of the following statements is NOT accurate regarding the situation reflected by this diagram?

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When a tax is placed on the buyers of a product, buyers pay

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Studies by economists have found that a 10 percent increase in the minimum wage decreases teenage employment 10 percent.

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Table 6-6 -Refer to Table 6-6. In this market, over what range of prices would a price floor set by the government be binding?

Correct AnswerverifiedA price floor must be set abov...View AnswerShow Answer

Figure 6-21 -Refer to Figure 6-21. What is the amount of the tax per unit?

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

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If the demand curve is more price elastic than the supply curve, will the buyers or the sellers bear a greater burden of a tax? Draw a diagram to illustrate your answer.

Correct AnswerverifiedWhen the demand curve is more elastic th...View AnswerShow Answer

​In a market with a binding price control,

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Figure 6-7 -Refer to Figure 6-7. Suppose a price floor of $8 is imposed on this market. As a result,

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Figure 6-2 -Refer to Figure 6-2. The price ceiling causes quantity

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Table 6-2 -Refer to Table 6-2. A price ceiling set at $20 will

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Price is the rationing mechanism in a free, competitive market.

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

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Figure 6-36 -Refer to Figure 6-36. If the government places a $2 tax in the market, the seller bears $2 of the tax burden.

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Price controls can generate inequities.

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Figure 6-12 -Refer to Figure 6-12. When the price ceiling applies in this market, and the supply curve for gasoline shifts from S₁ to S₂, the resulting quantity of gasoline that is bought and sold is

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Figure 6-32 -Refer to Figure 6-32. Which of the following statements is NOT accurate regarding the situation reflected by this diagram?

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A price floor must be set abov...
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When the demand curve is more elastic th...
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In a market with a binding price control,

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