Question 1

Figure 6-10 
-Refer to Figure 6-10. A price ceiling set at

Accepted Answer

A)   $6 will be binding and will result in a shortage of 10 units.
B)   $6 will be binding and will result in a shortage of 6 units.
C)   $16 will be binding and will result in a shortage of 10 units.
D)   $16 will be binding and will result in a shortage of 4 units.E) A) and B)
F) A) and C)

Question 2

The tax burden falls more heavily on the side of the market that is more inelastic.

Accepted Answer

A) True 
 B)False

Question 3

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 $12 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 B)
F) C) and D)

Question 4

Figure 6-22 
-Refer to Figure 6-22. The effective price sellers receive after the tax is imposed is

Accepted Answer

A)   $2.00.
B)   $3.50.
C)   $5.00.
D)   $3.00.E) None of the above
F) All of the above

Question 5

Which of the following was not a result of the luxury tax imposed by Congress in 1990?

Accepted Answer

A)   The larger part of the tax burden fell on sellers.
B)   A larger part of the tax burden fell on the middle class than on the rich.
C)   Even the wealthy demanded fewer luxury goods.
D)   The tax was never repealed or even modified.E) A) and B)
F) A) and D)

Question 6

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

Accepted Answer

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

Question 7

Figure 6-9 
-Refer to Figure 6-9. At which price would a price ceiling be nonbinding?

Accepted Answer

A)   $4
B)   $5
C)   $3
D)   $7E) A) and D)
F) None of the above

Question 8

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 9

Figure 6-25 
-Refer to Figure 6-25. The burden of the tax on sellers is

Accepted Answer

A)   $1 per unit.
B)   $1.50 per unit.
C)   $2 per unit.
D)   $3 per unit.E) B) and D)
F) All of the above

Question 10

When a binding price ceiling is imposed on a market for a good, some people who want to buy the good cannot do so.

Accepted Answer

A) True 
 B)False

Question 11

Suppose that the demand for digital cameras is elastic, and the supply of digital cameras is inelastic. A tax of $20 per camera levied on digital cameras will decrease the effective price received by sellers of digital cameras by

Accepted Answer

A)   less than $10
B)   $10.
C)   between $10 and $20.
D)   $20.E) B) and C)
F) A) and B)

Question 12

Binding price floors benefit sellers because they allow sellers to sell all the goods they want at a higher price.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

A binding price floor will reduce a firm's total revenue

Accepted Answer

A)   always.
B)   when demand is elastic.
C)   when demand is inelastic.
D)   never.E) None of the above
F) B) and D)

Question 15

Figure 6-25 
-Refer to Figure 6-25. The price that buyers pay after the tax is imposed is

Accepted Answer

A)   $5.
B)   $6.
C)   $7.
D)   $8.E) All of the above
F) A) and B)

Question 16

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

Accepted Answer

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

Question 17

Figure 6-9 
-Refer to Figure 6-9. At which price would a price floor be nonbinding?

Accepted Answer

A)   $8
B)   $7
C)   $6
D)   $9E) A) and B)
F) C) and D)

Question 18

Does a binding price ceiling result in a shortage or a surplus in the market?

Accepted Answer

A binding price ceil...

Question 19

Which of the following causes a shortage of a good?

Accepted Answer

A)   a binding price floor
B)   a binding price ceiling
C)   a tax on the good
D)   None of the above is correct.E) None of the above
F) C) and D)

Question 20

Price floors are typically imposed to benefit buyers.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

The tax burden falls more heavily on the side of the market that is more inelastic.

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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 sellers receive per unit after the tax is imposed?

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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 $12 in this market is an example of a

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Figure 6-25 -Refer to Figure 6-25. The price that buyers pay after the tax is imposed is

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Which of the following was not a result of the luxury tax imposed by Congress in 1990?

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Figure 6-10 -Refer to Figure 6-10. A price ceiling set at

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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 buyers pay per unit after the tax is imposed?

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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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Binding price floors benefit sellers because they allow sellers to sell all the goods they want at a higher price.

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Price floors are typically imposed to benefit buyers.

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Figure 6-9 -Refer to Figure 6-9. At which price would a price ceiling be nonbinding?

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

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When a binding price ceiling is imposed on a market for a good, some people who want to buy the good cannot do so.

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Suppose that the demand for digital cameras is elastic, and the supply of digital cameras is inelastic. A tax of $20 per camera levied on digital cameras will decrease the effective price received by sellers of digital cameras by

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Which of the following causes a shortage of a good?

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Figure 6-9 -Refer to Figure 6-9. At which price would a price floor be nonbinding?

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A binding price floor will reduce a firm's total revenue

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Figure 6-25 -Refer to Figure 6-25. The burden of the tax on sellers is

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Does a binding price ceiling result in a shortage or a surplus in the market?

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Figure 6-22 -Refer to Figure 6-22. The effective price sellers receive after the tax is imposed is

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A binding price ceil...
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