Question 1

Advocates of the minimum wage

Accepted Answer

A)   deny that the minimum wage produces any adverse effects.
B)   emphasize the benefits to teenagers of increases in the minimum wage.
C)   emphasize the low annual incomes of those who work for the minimum wage.
D)   All of the above are correct.E) A) and C)
F) C) and D)

Question 2

If a nonbinding price ceiling is imposed on a market,then the

Accepted Answer

A)   quantity sold in the market will decrease.
B)   quantity sold in the market will stay the same.
C)   price in the market will increase.
D)   price in the market will decrease.E) B) and C)
F) All of the above

Question 3

A $0.50 tax levied on the buyers of pomegranate juice will shift the demand curve

Accepted Answer

A)   upward by exactly $0.50.
B)   upward by less than $0.50.
C)   downward by exactly $0.50.
D)   downward by less than $0.50.E) A) and B)
F) B) and C)

Question 4

Figure 6-2
This figure shows the market demand and market supply curves for good X. 
-Refer to Figure 6-2.Which of the following statements is correct?

Accepted Answer

A)   A price ceiling set at $6 would be binding,but a price ceiling set at $4 would not be binding.
B)   A price floor set at $4 would be binding,but a price ceiling set at $4 would not be binding.
C)   A price ceiling set at $3.50 would result in a surplus.
D)   A price floor set at $6.50 would result in a surplus.E) A) and B)
F) A) and C)

Question 5

Price ceilings are typically imposed to benefit buyers.

Accepted Answer

A) True 
 B)False

Question 6

A binding minimum wage raises the incomes of some workers,but it lowers the incomes of workers who cannot find jobs.

Accepted Answer

A) True 
 B)False

Question 7

Figure 6-21 
-Refer to Figure 6-21.The equilibrium price in the market before the tax is imposed is

Accepted Answer

A)   $1.
B)   $2.
C)   $5.
D)   $6.E) None of the above
F) A) and B)

Question 8

Workers,rather than firms,bear most of the burden of the payroll tax.

Accepted Answer

A) True 
 B)False

Question 9

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)   $5E) A) and D)
F) None of the above

Question 10

Figure 6-7 
-Refer to Figure 6-7.Suppose a price floor of $7 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 so as to now pass through the point (quantity = 40,price = $7) .
C)   the quantity of the good demanded decreases by 20 units.
D)   the price of the good continues to serve as the rationing mechanism.E) C) and D)
F) A) and B)

Question 11

Figure 6-11 
-Refer to Figure 6-11.Which of the following statements is not correct?

Accepted Answer

A)   A government-imposed price of $9 would be a binding price floor if market demand is Demand A and a binding price ceiling if market demand is Demand B.
B)   A government-imposed price of $15 would be a binding price ceiling if market demand is either Demand A or Demand B.
C)   A government-imposed price of $3 would be a binding price ceiling if market demand is either Demand A or Demand B.
D)   A government-imposed price of $12 would be a binding price floor if market demand is Demand A and a non-binding price ceiling if market demand is Demand B.E) All of the above
F) None of the above

Question 12

In 2009,the U.S.minimum wage according to federal law was

Accepted Answer

A)   $4.25 per hour.
B)   $5.15 per hour.
C)   $5.75 per hour.
D)   $7.25 per hour.E) B) and D)
F) A) and B)

Question 13

Figure 6-19 
-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 D)
F) A) and C)

Question 14

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)   Both a and b are correct.E) All of the above
F) C) and D)

Question 15

Figure 6-18 
-Refer to Figure 6-18.Suppose the same supply and demand curves apply,and a tax of the same amount per unit as shown here is imposed.Now,however,the buyers of the good,rather than the sellers,are required to pay the tax to the government.After the buyers pay the tax,relative to the case depicted in the figure,the burden on buyers will be

Accepted Answer

A)   larger,and the burden on sellers will be smaller.
B)   smaller,and the burden on sellers will be larger.
C)   the same,and the burden on sellers will be the same.
D)   The relative burdens in the two cases cannot be determined without further information.E) A) and B)
F) None of the above

Question 16

A tax on golf clubs will cause buyers of golf clubs to pay a higher price,sellers of golf clubs to receive a lower price,and fewer golf clubs to be sold.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A binding price ceil...

Question 18

Suppose buyers of tequila are required to send $1.00 to the government for every bottle of tequila they buy.Further,suppose this tax causes the effective price received by sellers of tequila to fall by $0.80 per bottle.Which of the following statements is correct?

Accepted Answer

A)   This tax causes the demand curve for tequila to shift downward by $1.00 at each quantity of tequila.
B)   The price paid by buyers is $0.20 per bottle more than it was before the tax.
C)   Eighty percent of the burden of the tax falls on sellers.
D)   All of the above are correct.E) None of the above
F) All of the above

Question 19

If a tax is levied on the sellers of a product,then the supply curve will

Accepted Answer

A)   shift up.
B)   shift down.
C)   become flatter.
D)   not shift.E) B) and C)
F) C) and D)

Question 20

Assume the demand for cigarettes is relatively inelastic,and the supply of cigarettes is relatively elastic.When cigarettes are taxed,we would expect

Accepted Answer

A)   most of the burden of the tax to fall on sellers of cigarettes,regardless of whether buyers or sellers of cigarettes are required to pay the tax to the government.
B)   most of the burden of the tax to fall on buyers of cigarettes,regardless of whether buyers or sellers of cigarettes are required to pay the tax to the government.
C)   the distribution of the tax burden between buyers and sellers of cigarettes to depend on whether buyers or sellers of cigarettes are required to pay the tax to the government.
D)   a large percentage of smokers to quit smoking in response to the tax.E) A) and B)
F) A) and C)

Exam 6: Supply,demand,and Government Policies

A binding minimum wage raises the incomes of some workers,but it lowers the incomes of workers who cannot find jobs.

Correct Answer
verified

Assume the demand for cigarettes is relatively inelastic,and the supply of cigarettes is relatively elastic.When cigarettes are taxed,we would expect

Correct Answer
verified

Suppose buyers of tequila are required to send $1.00 to the government for every bottle of tequila they buy.Further,suppose this tax causes the effective price received by sellers of tequila to fall by $0.80 per bottle.Which of the following statements is correct?

Correct Answer
verified

Price ceilings are typically imposed to benefit buyers.

Correct Answer
verified

Figure 6-19 -Suppose the government imposes a $40 tax on the buyers of refrigerators.The tax would

Correct Answer
verified

Figure 6-11 -Refer to Figure 6-11.Which of the following statements is not correct?

Correct Answer
verified

A tax on golf clubs will cause buyers of golf clubs to pay a higher price,sellers of golf clubs to receive a lower price,and fewer golf clubs to be sold.

Correct Answer
verified

In 2009,the U.S.minimum wage according to federal law was

Correct Answer
verified

Figure 6-2 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-2.Which of the following statements is correct?

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

Correct Answer
verified
A binding price ceil...
View Answer

Correct Answer
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Advocates of the minimum wage

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

Correct Answer
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Figure 6-21 -Refer to Figure 6-21.The equilibrium price in the market before the tax is imposed is

Correct Answer
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If a tax is levied on the sellers of a product,then the supply curve will

Correct Answer
verified

If a nonbinding price ceiling is imposed on a market,then the

Correct Answer
verified

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

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

Correct Answer
verified

Workers,rather than firms,bear most of the burden of the payroll tax.

Correct Answer
verified

A $0.50 tax levied on the buyers of pomegranate juice will shift the demand curve

Correct Answer
verified

Exam 6: Supply,demand,and Government Policies

A binding minimum wage raises the incomes of some workers,but it lowers the incomes of workers who cannot find jobs.

Correct AnswerverifiedShow Answer

Assume the demand for cigarettes is relatively inelastic,and the supply of cigarettes is relatively elastic.When cigarettes are taxed,we would expect

Correct AnswerverifiedShow Answer

Suppose buyers of tequila are required to send $1.00 to the government for every bottle of tequila they buy.Further,suppose this tax causes the effective price received by sellers of tequila to fall by $0.80 per bottle.Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Price ceilings are typically imposed to benefit buyers.

Correct AnswerverifiedShow Answer

Figure 6-19 -Suppose the government imposes a $40 tax on the buyers of refrigerators.The tax would

Correct AnswerverifiedShow Answer

Figure 6-11 -Refer to Figure 6-11.Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

A tax on golf clubs will cause buyers of golf clubs to pay a higher price,sellers of golf clubs to receive a lower price,and fewer golf clubs to be sold.

Correct AnswerverifiedShow Answer

In 2009,the U.S.minimum wage according to federal law was

Correct AnswerverifiedShow Answer

Figure 6-2 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-2.Which of the following statements is correct?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedA binding price ceil...View AnswerShow Answer

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Advocates of the minimum wage

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

Correct AnswerverifiedShow Answer

Figure 6-21 -Refer to Figure 6-21.The equilibrium price in the market before the tax is imposed is

Correct AnswerverifiedShow Answer

If a tax is levied on the sellers of a product,then the supply curve will

Correct AnswerverifiedShow Answer

If a nonbinding price ceiling is imposed on a market,then the

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Workers,rather than firms,bear most of the burden of the payroll tax.

Correct AnswerverifiedShow Answer

A $0.50 tax levied on the buyers of pomegranate juice will shift the demand curve

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A binding price ceil...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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