Question 1

Price controls often hurt those they are trying to help.

Accepted Answer

A) True 
 B)False

Question 2

Suppose that the demand for light bulbs is inelastic, and the supply of light bulbs is elastic. A tax of $2 per bulb levied on light bulbs will increase the price paid by buyers of light bulbs by

Accepted Answer

A)   less than $1.
B)   $1.
C)   between $1 and $2.
D)   $2.E) B) and D)
F) A) and B)

Question 3

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 4

Policymakers use taxes

Accepted Answer

A)   to raise revenue for public purposes but not to influence market outcomes.
B)   both to raise revenue for public purposes and to influence market outcomes.
C)   when they realize that price controls alone are insufficient to correct market inequities.
D)   only in those markets in which the burden of the tax falls clearly on the sellers.E) A) and C)
F) None of the above

Question 5

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

Question 6

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

Question 7

Long lines and discrimination are examples of rationing methods that may naturally develop in response to a binding price ceiling.

Accepted Answer

A) True 
 B)False

Question 8

Table 6-6 
-Refer to Table 6-6. If the government set a price floor at $2, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at $2 would ...

Question 9

Figure 6-25 
-Refer to Figure 6-25. As the figure is drawn, who sends the tax payment to the government?

Accepted Answer

A)   The buyers send the tax payment.
B)   The sellers send the tax payment.
C)   A portion of the tax payment is sent by the buyers, and the remaining portion is sent by the sellers.
D)   The question of who sends the tax payment cannot be determined from the figure.E) A) and C)
F) B) and C)

Question 10

If the government passes a law requiring sellers of mopeds to send $200 to the government for every moped they sell, then

Accepted Answer

A)   the supply curve for mopeds shifts downward by $200.
B)   sellers of mopeds receive $200 less per moped than they were receiving before the tax.
C)   buyers of mopeds are unaffected by the tax.
D)   None of the above is correct.E) A) and D)
F) A) and C)

Question 11

Using a supply and demand diagram, show a labor market with a binding minimum wage. Use the diagram to show those who are helped by the minimum wage and those who are hurt by the minimum wage.

Accepted Answer

<img  loading="lazy" src="/assets/images/blured-textbook.svg" class="d-inline m-1" alt="blured image" width="139" height="30"> Those who are helped by the minimum wag...

Question 12

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

Accepted Answer

A)   is not binding.
B)   creates a surplus.
C)   creates a shortage.
D)   Both a)  and b)  are correct.E) None of the above
F) B) and D)

Question 13

Buyers and sellers always share the burden of a tax equally.

Accepted Answer

A) True 
 B)False

Question 14

Figure 6-11 
-Refer to Figure 6-11. If the government imposes a price ceiling at $6, it would be

Accepted Answer

A)   binding if market demand is Demand A or Demand B.
B)   non-binding if market demand is Demand A or Demand B.
C)   binding if market demand is Demand A and non-binding if market demand is Demand B.
D)   non-binding if market demand is Demand A and binding if market demand is Demand B.E) A) and B)
F) A) and C)

Question 15

Figure 6-29
Suppose the government imposes a $2 on this market. 
-Refer to Figure 6-29. Suppose D1 represents the demand curve for gasoline in both the short run and long run, S1 represents the supply curve for gasoline in the short run, and S2 represents the supply curve for gasoline in the long run. After the imposition of the $2,

Accepted Answer

A)   buyers bear a higher burden of the tax in the short run than in the long run.
B)   sellers bear a higher burden of the tax in the short run than in the long run.
C)   buyers and sellers bear an equal burden of the tax in both the short run and long run.
D)   buyers and sellers bear an equal burden of the tax in the short run, but buyers bear a higher burden of the tax in the long run.E) B) and C)
F) All of the above

Question 16

Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $30 per ticket, then the

Accepted Answer

A)   demand curve will shift upward by $20, and the effective price received by sellers will increase by $20.
B)   demand curve will shift upward by $20, and the effective price received by sellers will increase by less than $20.
C)   supply curve will shift downward by $20, and the price paid by buyers will decrease by $20.
D)   supply curve will shift downward by $20, and the price paid by buyers will decrease by less than $20.E) C) and D)
F) B) and D)

Question 17

Figure 6-27
This figure shows the market demand and market supply curves for good Z. 
-Refer to Figure 6-27. Suppose a tax of $6 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Accepted Answer

A)   $16
B)   between $16 and $20
C)   between $20 and $22
D)   $22E) A) and C)
F) None of the above

Question 18

Suppose sellers of perfume are required to send $1.00 to the government for every bottle of perfume they sell. Further, suppose this tax causes the price paid by buyers of perfume to rise by $0.60 per bottle. Which of the following statements is correct?

Accepted Answer

A)   The effective price received by sellers is $0.40 per bottle less than it was before the tax.
B)   Sixty percent of the burden of the tax falls on sellers.
C)   This tax causes the demand curve for perfume to shift downward by $1.00 at each quantity of perfume.
D)   All of the above are correct.E) B) and C)
F) All of the above

Question 19

Workers determine the supply of labor, and firms determine the demand for labor.

Accepted Answer

A) True 
 B)False

Question 20

Figure 6-1
Panel (a)  Panel (b)   
-Refer to Figure 6-1. In which panel(s)  of the figure would there be a shortage of the good at the price ceiling?

Accepted Answer

A)   panel (a)  only
B)   panel (b)  only
C)   both panel (a)  and panel (b) 
D)   neither panel (a)  nor panel (b) E) B) and D)
F) B) and C)

Exam 6: Supply, Demand, and Government Policies

Figure 6-11 -Refer to Figure 6-11. If the government imposes a price ceiling at $6, it would be

Correct Answer
verified

Table 6-6 -Refer to Table 6-6. If the government set a price floor at $2, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct Answer
verified
A price floor set at $2 would ...
View Answer

Workers determine the supply of labor, and firms determine the demand for labor.

Correct Answer
verified

Figure 6-1 Panel (a) Panel (b) -Refer to Figure 6-1. In which panel(s) of the figure would there be a shortage of the good at the price ceiling?

Correct Answer
verified

Figure 6-25 -Refer to Figure 6-25. As the figure is drawn, who sends the tax payment to the government?

Correct Answer
verified

If the government passes a law requiring sellers of mopeds to send $200 to the government for every moped they sell, then

Correct Answer
verified

Suppose that the demand for light bulbs is inelastic, and the supply of light bulbs is elastic. A tax of $2 per bulb levied on light bulbs will increase the price paid by buyers of light bulbs by

Correct Answer
verified

Long lines and discrimination are examples of rationing methods that may naturally develop in response to a binding price ceiling.

Correct Answer
verified

Correct Answer
verified

Using a supply and demand diagram, show a labor market with a binding minimum wage. Use the diagram to show those who are helped by the minimum wage and those who are hurt by the minimum wage.

Correct Answer
verified
Those who are helped by the minimum wag...
View Answer

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

Correct Answer
verified

Suppose sellers of perfume are required to send $1.00 to the government for every bottle of perfume they sell. Further, suppose this tax causes the price paid by buyers of perfume to rise by $0.60 per bottle. Which of the following statements is correct?

Correct Answer
verified

Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $30 per ticket, then the

Correct Answer
verified

Which of the following is correct?

Correct Answer
verified

Figure 6-27 This figure shows the market demand and market supply curves for good Z. -Refer to Figure 6-27. Suppose a tax of $6 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Correct Answer
verified

Policymakers use taxes

Correct Answer
verified

Buyers and sellers always share the burden of a tax equally.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Price controls often hurt those they are trying to help.

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

Figure 6-11 -Refer to Figure 6-11. If the government imposes a price ceiling at $6, it would be

Correct AnswerverifiedShow Answer

Table 6-6 -Refer to Table 6-6. If the government set a price floor at $2, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedA price floor set at $2 would ...View AnswerShow Answer

Workers determine the supply of labor, and firms determine the demand for labor.

Correct AnswerverifiedShow Answer

Figure 6-1 Panel (a) Panel (b) -Refer to Figure 6-1. In which panel(s) of the figure would there be a shortage of the good at the price ceiling?

Correct AnswerverifiedShow Answer

Figure 6-25 -Refer to Figure 6-25. As the figure is drawn, who sends the tax payment to the government?

Correct AnswerverifiedShow Answer

If the government passes a law requiring sellers of mopeds to send $200 to the government for every moped they sell, then

Correct AnswerverifiedShow Answer

Suppose that the demand for light bulbs is inelastic, and the supply of light bulbs is elastic. A tax of $2 per bulb levied on light bulbs will increase the price paid by buyers of light bulbs by

Correct AnswerverifiedShow Answer

Long lines and discrimination are examples of rationing methods that may naturally develop in response to a binding price ceiling.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Using a supply and demand diagram, show a labor market with a binding minimum wage. Use the diagram to show those who are helped by the minimum wage and those who are hurt by the minimum wage.

Correct Answerverified Those who are helped by the minimum wag...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Suppose sellers of perfume are required to send $1.00 to the government for every bottle of perfume they sell. Further, suppose this tax causes the price paid by buyers of perfume to rise by $0.60 per bottle. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $30 per ticket, then the

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

Figure 6-27 This figure shows the market demand and market supply curves for good Z. -Refer to Figure 6-27. Suppose a tax of $6 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Correct AnswerverifiedShow Answer

Policymakers use taxes

Correct AnswerverifiedShow Answer

Buyers and sellers always share the burden of a tax equally.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Price controls often hurt those they are trying to help.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
A price floor set at $2 would ...
View 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
Those who are helped by the minimum wag...
View 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