Question 1

Rent control may lead to lower rents for those who find housing, but the quality of the housing may also be lower.

Accepted Answer

A) True 
 B)False

Question 2

A tax on the buyers of cameras encourages

Accepted Answer

A)   sellers to supply a smaller quantity at every price.
B)   buyers to demand a smaller quantity at every price.
C)   sellers to supply a larger quantity at every price.
D)   Both a)  and b)  are correct.E) None of the above
F) A) and D)

Question 3

Figure 6-6 
-Refer to Figure 6-6. If the government imposes a price floor of $10 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 10 units.E) B) and D)
F) A) and B)

Question 4

Figure 6-28 
-Refer to Figure 6-28. Suppose a tax of $4 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Accepted Answer

A)   $4
B)   between $4 and $7
C)   between $7 and $10
D)   $10E) C) and D)
F) All of the above

Question 5

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

Question 6

Which of the following is not a short-run effect of rent control on the housing market?

Accepted Answer

A)   reduced rents
B)   a large shortage
C)   a small increase in quantity demanded
D)   a small decrease in quantity suppliedE) B) and C)
F) B) and D)

Question 7

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) A) and D)
F) All of the above

Question 8

Table 6-3
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 $2 above the equilibrium price in this market.
 
-Refer to Table 6-3. How many units of the good are sold after the imposition of the price floor?

Accepted Answer

A)   5
B)   9
C)   10
D)   15E) B) and D)
F) A) and D)

Question 9

A binding price floor 
i)  causes a surplus.
Ii)  causes a shortage.
Iii)  is set at a price above the equilibrium price.
Iv)  is set at a price below the equilibrium price.

Accepted Answer

A)   i)  only
B)   iii)  only
C)   i)  and iii)  only
D)   ii)  and iv)  onlyE) All of the above
F) A) and C)

Question 10

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) All of the above
F) A) and B)

Question 11

Figure 6-26 
-Refer to Figure 6-26. The amount of the tax per unit is

Accepted Answer

A)   $4.
B)   $8.
C)   $14.
D)   $10.E) None of the above
F) All of the above

Question 12

Which of the following is not correct?

Accepted Answer

A)   Taxes levied on sellers and taxes levied on buyers are not equivalent.
B)   A tax places a wedge between the price that buyers pay and the price that sellers receive.
C)   The wedge between the buyers' price and the sellers' price is the same, regardless of whether the tax levied on buyers or sellers.
D)   In the new after-tax equilibrium, buyers and sellers share the burden of the tax.E) B) and D)
F) C) and D)

Question 13

Figure 6-16 
-Refer to Figure 6-16. In this market, a minimum wage of $2.75 creates a labor

Accepted Answer

A)   shortage of 2,250 workers.
B)   shortage of 4,500 workers.
C)   surplus of 2,250 workers.
D)   neither a labor shortage nor surplus.E) A) and B)
F) A) and C)

Question 14

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

Question 15

Figure 6-1
Panel a)  Panel b) 
  
-Refer to Figure 6-1. The price ceiling shown in panel b)

Accepted Answer

A)   is not binding.
B)   creates a surplus.
C)   creates a shortage.
D)   Both a)  and b)  are correct.E) A) and D)
F) B) and C)

Question 16

A tax on the buyers of personal computer external hard drives encourages

Accepted Answer

A)   sellers to supply a smaller quantity at every price.
B)   buyers to demand a smaller quantity at every price.
C)   buyers to demand a larger quantity at every price.
D)   Both a)  and b)  are correct.E) A) and B)
F) All of the above

Question 17

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

Question 18

One disadvantage of government subsidies over price controls is that subsidies

Accepted Answer

A)   prevent the attainment of equilibrium in the markets in which they are imposed.
B)   make higher taxes necessary.
C)   are always unfair to those with low incomes.
D)   cause unemployment.E) C) and D)
F) B) and C)

Question 19

Figure 6-23
 
-Refer to Figure 6-23. For every unit of the good that is sold, sellers are required to send

Accepted Answer

A)   one dollar to the government, and buyers are required to send two dollars to the government.
B)   two dollars to the government, and buyers are required to send one dollar to the government.
C)   three dollars to the government, and buyers are required to send nothing to the government.
D)   nothing to the government, and buyers are required to send two dollars to the government.E) C) and D)
F) B) and D)

Question 20

The tax incidence depends on whether the tax is levied on buyers or sellers.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

A tax on the buyers of personal computer external hard drives encourages

Correct Answer
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One disadvantage of government subsidies over price controls is that subsidies

Correct Answer
verified

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

Correct Answer
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Figure 6-28 -Refer to Figure 6-28. Suppose a tax of $4 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Correct Answer
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Which of the following is not a short-run effect of rent control on the housing market?

Correct Answer
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Figure 6-6 -Refer to Figure 6-6. If the government imposes a price floor of $10 on this market, then there will be

Correct Answer
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A binding price floor i) causes a surplus. Ii) causes a shortage. Iii) is set at a price above the equilibrium price. Iv) is set at a price below the equilibrium price.

Correct Answer
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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
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Which of the following is not correct?

Correct Answer
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Rent control may lead to lower rents for those who find housing, but the quality of the housing may also be lower.

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

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

Correct Answer
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Figure 6-16 -Refer to Figure 6-16. In this market, a minimum wage of $2.75 creates a labor

Correct Answer
verified

The tax incidence depends on whether the tax is levied on buyers or sellers.

Correct Answer
verified

Figure 6-23 -Refer to Figure 6-23. For every unit of the good that is sold, sellers are required to send

Correct Answer
verified

Figure 6-1 Panel a) Panel b) -Refer to Figure 6-1. The price ceiling shown in panel b)

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

Correct Answer
verified

Figure 6-26 -Refer to Figure 6-26. The amount of the tax per unit is

Correct Answer
verified

A tax on the buyers of cameras encourages

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

A tax on the buyers of personal computer external hard drives encourages

Correct AnswerverifiedShow Answer

One disadvantage of government subsidies over price controls is that subsidies

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-28 -Refer to Figure 6-28. Suppose a tax of $4 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Correct AnswerverifiedShow Answer

Which of the following is not a short-run effect of rent control on the housing market?

Correct AnswerverifiedShow Answer

Figure 6-6 -Refer to Figure 6-6. If the government imposes a price floor of $10 on this market, then there will be

Correct AnswerverifiedShow Answer

A binding price floor i) causes a surplus. Ii) causes a shortage. Iii) is set at a price above the equilibrium price. Iv) is set at a price below the equilibrium price.

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

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Rent control may lead to lower rents for those who find housing, but the quality of the housing may also be lower.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-16 -Refer to Figure 6-16. In this market, a minimum wage of $2.75 creates a labor

Correct AnswerverifiedShow Answer

The tax incidence depends on whether the tax is levied on buyers or sellers.

Correct AnswerverifiedShow Answer

Figure 6-23 -Refer to Figure 6-23. For every unit of the good that is sold, sellers are required to send

Correct AnswerverifiedShow Answer

Figure 6-1 Panel a) Panel b) -Refer to Figure 6-1. The price ceiling shown in panel b)

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-26 -Refer to Figure 6-26. The amount of the tax per unit is

Correct AnswerverifiedShow Answer

A tax on the buyers of cameras encourages

Correct AnswerverifiedShow Answer

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