Question 1

Define a price ceiling.

Accepted Answer

A price ceiling is a...

Question 2

Figure 6-20 
-Refer to Figure 6-20. Suppose a tax of $5 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Accepted Answer

A)  $5
B)  between $5 and $10
C)  between $10 and $14
D)  $14E) A) and D)
F) A) and C)

Question 3

Figure 6-7 
-Refer to Figure 6-7. Which of the following price controls would cause a shortage of 20 units of the good?

Accepted Answer

A)  a price ceiling set at $6
B)  a price ceiling set at $5
C)  a price floor set at $9
D)  a price floor set at $8E) C) and D)
F) A) and B)

Question 4

Figure 6-13
This figure shows the market demand and market supply curves for good X. 
-Refer to Figure 6-13. If the government imposes a price ceiling of $4 on this market, then there will be

Accepted Answer

A)  no shortage.
B)  a shortage of 5 units.
C)  a shortage of 10 units.
D)  a shortage of 20 units.E) C) and D)
F) B) and D)

Question 5

As a rationing mechanism, discrimination according to seller bias is

Accepted Answer

A)  efficient and fair.
B)  efficient, but potentially unfair.
C)  inefficient, but fair.
D)  inefficient and potentially unfair.E) A) and B)
F) A) and C)

Question 6

​Figure 6-33
The diagram shows the effect of a tax as measured by the distance between J and K. 
-Refer to Figure 6-33. Based upon the diagram,​

Accepted Answer

A)  ​more of the incidence of the tax is on buyers, since the demand curve is more elastic than the supply curve.
B)  ​more of the incidence of the tax is on sellers, since the demand curve is less elastic than is the supply curve .
C)  more of the incidence of the tax is on sellers, since supply is more inelastic than demand.​
D)  ​more of the incidence of the tax is on buyers, since supply is more inelastic than demand.E) None of the above
F) A) and B)

Question 7

Which of the following is correct?

Accepted Answer

A)  Rent control and the minimum wage are both examples of price ceilings.
B)  Rent control is an example of a price ceiling, and the minimum wage is an example of a price floor.
C)  Rent control is an example of a price floor, and the minimum wage is an example of a price ceiling.
D)  Rent control and the minimum wage are both examples of price floors.E) C) and D)
F) B) and D)

Question 8

A price ceiling set above the equilibrium price causes quantity demanded to exceed quantity supplied.

Accepted Answer

A) True 
 B)False

Question 9

A tax imposed on the sellers of a good will lower the

Accepted Answer

A)  price paid by buyers and lower the equilibrium quantity.
B)  price paid by buyers and raise the equilibrium quantity.
C)  effective price received by sellers and lower the equilibrium quantity.
D)  effective price received by sellers and raise the equilibrium quantity.E) A) and D)
F) A) and C)

Question 10

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 B)
F) A) and C)

Question 11

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

Accepted Answer

A)  causes a shortage of 45 units of the good.
B)  makes it necessary for sellers to ration the good.
C)  is not binding because it is set below the equilibrium price.
D)  causes a shortage of 40 units of the good.E) A) and B)
F) None of the above

Question 12

Under rent control, tenants can expect

Accepted Answer

A)  lower rent and higher quality housing.
B)  lower rent and lower quality housing.
C)  higher rent and a shortage of rental housing.
D)  higher rent and a surplus of rental housing.E) A) and B)
F) A) and C)

Question 13

Figure 6-6 
-Refer to Figure 6-6. In which of the following cases would sellers have to develop a rationing mechanism?

Accepted Answer

A)  a price ceiling set at $8
B)  a price ceiling set at $6
C)  a price floor set at $8
D)  a price floor set at $6E) All of the above
F) C) and D)

Question 14

In a competitive market free of government regulation,

Accepted Answer

A)  price adjusts until quantity demanded is greater than quantity supplied.
B)  price adjusts until quantity demanded is less than quantity supplied.
C)  price adjusts until quantity demanded equals quantity supplied.
D)  supply adjusts to meet demand at every price.E) A) and D)
F) A) and B)

Question 15

Binding price ceilings benefit consumers because they allow consumers to buy all the goods they demand at a lower price.

Accepted Answer

A) True 
 B)False

Question 16

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

Question 17

Figure 6-19 
-Refer to Figure 6-19. Suppose a tax of $2 per unit is imposed on this market. How much will sellers receive per unit after the tax is imposed?

Accepted Answer

A)  $3
B)  between $3 and $5
C)  between $5 and $7
D)  $7E) C) and D)
F) B) and D)

Question 18

How is the burden of a tax divided?
(i) When the tax is levied on the sellers, the sellers bear a higher proportion of the tax burden.
(ii) When the tax is levied on the buyers, the buyers bear a higher proportion of the tax burden.
(iii) Regardless of whether the tax is levied on the buyers or the sellers, the buyers and sellers bear an equal proportion of the tax burden.
(iv) Regardless of whether the tax is levied on the buyers or the sellers, the buyers and sellers bear some proportion of the tax burden.

Accepted Answer

A)  (i)  and (ii)  only
B)  (iv)  only
C)  (i) , (ii) , and (iii)  only
D)  (i) , (ii) , and (iv)  onlyE) A) and C)
F) C) and D)

Question 19

States in the U.S. may mandate minimum wages above the federal level.

Accepted Answer

A) True 
 B)False

Question 20

Figure 6-18
The vertical distance between points A and B represents the tax in the market. 
-Refer to Figure 6-18. The per-unit burden of the tax on buyers is

Accepted Answer

A)  $6.
B)  $8.
C)  $14.
D)  $24.E) None of the above
F) A) and D)

Exam 6: Supply, Demand, and Government Policies

In a competitive market free of government regulation,

Correct Answer
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Define a price ceiling.

Correct Answer
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A price ceiling is a...
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Under rent control, tenants can expect

Correct Answer
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Figure 6-7 -Refer to Figure 6-7. Which of the following price controls would cause a shortage of 20 units of the good?

Correct Answer
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Correct Answer
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As a rationing mechanism, discrimination according to seller bias is

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

Correct Answer
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Figure 6-18 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-18. The per-unit burden of the tax on buyers is

Correct Answer
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Figure 6-2 -Refer to Figure 6-2. The price ceiling

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Figure 6-20 -Refer to Figure 6-20. Suppose a tax of $5 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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A tax imposed on the sellers of a good will lower the

Correct Answer
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Figure 6-6 -Refer to Figure 6-6. In which of the following cases would sellers have to develop a rationing mechanism?

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

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Which of the following is correct?

Correct Answer
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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. If the government imposes a price ceiling of $4 on this market, then there will be

Correct Answer
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A price ceiling set above the equilibrium price causes quantity demanded to exceed quantity supplied.

Correct Answer
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Figure 6-33 The diagram shows the effect of a tax as measured by the distance between J and K. -Refer to Figure 6-33. Based upon the diagram,

Correct Answer
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Binding price ceilings benefit consumers because they allow consumers to buy all the goods they demand at a lower price.

Correct Answer
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States in the U.S. may mandate minimum wages above the federal level.

Correct Answer
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Figure 6-19 -Refer to Figure 6-19. Suppose a tax of $2 per unit is imposed on this market. How much will sellers receive per unit after the tax is imposed?

Correct Answer
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Exam 6: Supply, Demand, and Government Policies

In a competitive market free of government regulation,

Correct AnswerverifiedShow Answer

Define a price ceiling.

Correct AnswerverifiedA price ceiling is a...View AnswerShow Answer

Under rent control, tenants can expect

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Figure 6-7 -Refer to Figure 6-7. Which of the following price controls would cause a shortage of 20 units of the good?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

As a rationing mechanism, discrimination according to seller bias is

Correct AnswerverifiedShow Answer

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

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Figure 6-18 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-18. The per-unit burden of the tax on buyers is

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

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Figure 6-20 -Refer to Figure 6-20. Suppose a tax of $5 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

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A tax imposed on the sellers of a good will lower the

Correct AnswerverifiedShow Answer

Figure 6-6 -Refer to Figure 6-6. In which of the following cases would sellers have to develop a rationing mechanism?

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

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Which of the following is correct?

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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. If the government imposes a price ceiling of $4 on this market, then there will be

Correct AnswerverifiedShow Answer

A price ceiling set above the equilibrium price causes quantity demanded to exceed quantity supplied.

Correct AnswerverifiedShow Answer

​Figure 6-33 The diagram shows the effect of a tax as measured by the distance between J and K. -Refer to Figure 6-33. Based upon the diagram,​

Correct AnswerverifiedShow Answer

Binding price ceilings benefit consumers because they allow consumers to buy all the goods they demand at a lower price.

Correct AnswerverifiedShow Answer

States in the U.S. may mandate minimum wages above the federal level.

Correct AnswerverifiedShow Answer

Figure 6-19 -Refer to Figure 6-19. Suppose a tax of $2 per unit is imposed on this market. How much will sellers receive per unit after the tax is imposed?

Correct AnswerverifiedShow Answer

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A price ceiling is a...
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Figure 6-33 The diagram shows the effect of a tax as measured by the distance between J and K. -Refer to Figure 6-33. Based upon the diagram,

Correct Answer
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