Question 1

Figure 6-19 
-If a tax is levied on the buyers of dog food,then

Accepted Answer

A)   buyers will bear the entire burden of the tax.
B)   sellers will bear the entire burden of the tax.
C)   buyers and sellers will share the burden of the tax.
D)   the government will bear the entire burden of the tax.E) All of the above
F) A) and B)

Question 2

A surplus results when a

Accepted Answer

A)   nonbinding price floor is imposed on a market.
B)   nonbinding price floor is removed from a market.
C)   binding price floor is imposed on a market.
D)   binding price floor is removed from a market.E) B) and C)
F) All of the above

Question 3

Economic policies often have effects that their architects did not intend or anticipate.

Accepted Answer

A) True 
 B)False

Question 4

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

Question 5

Figure 6-27 
-Refer to Figure 6-27.If the government places a $2 tax in the market,the buyer pays $4.

Accepted Answer

A) True 
 B)False

Question 6

Unlike minimum wage laws,wage subsidies

Accepted Answer

A)   discourage firms from hiring the working poor.
B)   cause unemployment.
C)   help only wealthy workers.
D)   raise the living standards of the working poor without creating unemployment.E) None of the above
F) B) and C)

Question 7

Suppose the government has imposed a price ceiling on laptop computers.Which of the following events could transform the price ceiling from one that is not binding into one that is binding?

Accepted Answer

A)   Improvements in production technology reduce the costs of producing laptop computers.
B)   The number of firms selling laptop computers decreases.
C)   Consumers' income decreases,and laptop computers are a normal good.
D)   The number of consumers buying laptop computers decreases.E) A) and B)
F) None of the above

Question 8

A tax imposed on the buyers 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) C) and D)
F) B) and C)

Question 9

If the government levies a $500 tax per car on sellers of cars,then the price received by sellers of cars would

Accepted Answer

A)   decrease by less than $500.
B)   decrease by exactly $500.
C)   decrease by more than $500.
D)   increase by an indeterminate amount.E) A) and B)
F) A) and C)

Question 10

A tax on buyers will shift the

Accepted Answer

A)   demand curve upward by the amount of the tax.
B)   demand curve downward by the amount of the tax.
C)   supply curve upward by the amount of the tax.
D)   supply curve downward by the amount of the tax.E) B) and C)
F) All of the above

Question 11

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

Accepted Answer

A)   $4 will be binding and will result in a shortage of 3 units.
B)   $4 will be binding and will result in a shortage of 6 units.
C)   $7 will be binding and will result in a surplus of 6 units.
D)   $7 will be binding and will result in a surplus of 12 units.E) None of the above
F) A) and C)

Question 12

If a tax is levied on the buyers of a product,then there will be a(n)

Accepted Answer

A)   upward shift of the demand curve.
B)   downward shift of the demand curve.
C)   movement up and to the left along the demand curve.
D)   movement down and to the right along the demand curve.E) A) and B)
F) A) and C)

Question 13

When a tax is placed on the sellers of a product,the

Accepted Answer

A)   size of the market decreases.
B)   effective price received by sellers decreases,and the price paid by buyers increases.
C)   supply of the product decreases.
D)   All of the above are correct.E) B) and C)
F) A) and B)

Question 14

The term tax incidence refers to how the burden of a tax is distributed among the various people who make up the economy.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following causes a surplus of a good?

Accepted Answer

A)   a binding price floor
B)   a binding price ceiling
C)   a tax on the good
D)   More than one of the above is correct.E) B) and D)
F) A) and C)

Question 16

Figure 6-8 1 dollars per unit for that quantity and sellers are willing and able to accept a minimum of P2 dollars per unit for that quantity.If P1 - P2 = $3,then the price control is A)  a price ceiling of $2.00. B)  a price ceiling of $5.00. C)  a price floor of $5.00. D)  either a price ceiling of $2.00 or a price floor of $5.00." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 6-8.When a certain price control is imposed on this market,the resulting quantity of the good that is actually bought and sold is such that buyers are willing and able to pay a maximum of P1 dollars per unit for that quantity and sellers are willing and able to accept a minimum of P2 dollars per unit for that quantity.If P1 - P2 = $3,then the price control is

Accepted Answer

A)   a price ceiling of $2.00.
B)   a price ceiling of $5.00.
C)   a price floor of $5.00.
D)   either a price ceiling of $2.00 or a price floor of $5.00.E) A) and B)
F) B) and D)

Question 17

The price paid by buyers in a market will increase if the government (i) 
Increases a binding price floor in that market.
(ii) 
Increases a binding price ceiling in that market.
(iii) 
Decreases a tax on the good sold in that market.

Accepted Answer

A)   (ii) only
B)   (iii) only
C)   (i) and (ii) only
D)   (i) , (ii) ,and (iii) E) B) and D)
F) All of the above

Question 18

Suppose the government imposes a 20-cent tax on the sellers of iced tea.Which of the following is not correct? The tax would

Accepted Answer

A)   shift the supply curve upward by 20 cents.
B)   raise the equilibrium price by 20 cents.
C)   reduce the equilibrium quantity.
D)   discourage market activity.E) A) and B)
F) B) and C)

Question 19

Figure 6-4 
-Refer to Figure 6-4.A government-imposed price of $6 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) A) and C)

Question 20

Figure 6-4 
-Refer to Figure 6-4.A government-imposed price of $6 in this market could be an example of a 
(i) Binding price ceiling.
(ii) Non-binding price ceiling.
(iii) Binding price floor.
(iv) Non-binding price floor.

Accepted Answer

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

Exam 6: Supply,demand,and Government Policies

The price paid by buyers in a market will increase if the government (i) Increases a binding price floor in that market. (ii) Increases a binding price ceiling in that market. (iii) Decreases a tax on the good sold in that market.

Correct Answer
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Figure 6-4 -Refer to Figure 6-4.A government-imposed price of $6 in this market could be an example of a (i) Binding price ceiling. (ii) Non-binding price ceiling. (iii) Binding price floor. (iv) Non-binding price floor.

Correct Answer
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If the government levies a $500 tax per car on sellers of cars,then the price received by sellers of cars would

Correct Answer
verified

Suppose the government imposes a 20-cent tax on the sellers of iced tea.Which of the following is not correct? The tax would

Correct Answer
verified

If a tax is levied on the buyers of a product,then there will be a(n)

Correct Answer
verified

When a tax is placed on the sellers of a product,the

Correct Answer
verified

Suppose the government has imposed a price ceiling on laptop computers.Which of the following events could transform the price ceiling from one that is not binding into one that is binding?

Correct Answer
verified

A surplus results when a

Correct Answer
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Figure 6-27 -Refer to Figure 6-27.If the government places a $2 tax in the market,the buyer pays $4.

Correct Answer
verified

Unlike minimum wage laws,wage subsidies

Correct Answer
verified

A tax on buyers will shift the

Correct Answer
verified

Figure 6-19 -If a tax is levied on the buyers of dog food,then

Correct Answer
verified

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

Correct Answer
verified

Figure 6-4 -Refer to Figure 6-4.A government-imposed price of $6 in this market is an example of a

Correct Answer
verified

Economic policies often have effects that their architects did not intend or anticipate.

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

Correct Answer
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Which of the following causes a surplus of a good?

Correct Answer
verified

The term tax incidence refers to how the burden of a tax is distributed among the various people who make up the economy.

Correct Answer
verified

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

Correct Answer
verified

Exam 6: Supply,demand,and Government Policies

The price paid by buyers in a market will increase if the government (i) Increases a binding price floor in that market. (ii) Increases a binding price ceiling in that market. (iii) Decreases a tax on the good sold in that market.

Correct AnswerverifiedShow Answer

Figure 6-4 -Refer to Figure 6-4.A government-imposed price of $6 in this market could be an example of a (i) Binding price ceiling. (ii) Non-binding price ceiling. (iii) Binding price floor. (iv) Non-binding price floor.

Correct AnswerverifiedShow Answer

If the government levies a $500 tax per car on sellers of cars,then the price received by sellers of cars would

Correct AnswerverifiedShow Answer

Suppose the government imposes a 20-cent tax on the sellers of iced tea.Which of the following is not correct? The tax would

Correct AnswerverifiedShow Answer

If a tax is levied on the buyers of a product,then there will be a(n)

Correct AnswerverifiedShow Answer

When a tax is placed on the sellers of a product,the

Correct AnswerverifiedShow Answer

Suppose the government has imposed a price ceiling on laptop computers.Which of the following events could transform the price ceiling from one that is not binding into one that is binding?

Correct AnswerverifiedShow Answer

A surplus results when a

Correct AnswerverifiedShow Answer

Figure 6-27 -Refer to Figure 6-27.If the government places a $2 tax in the market,the buyer pays $4.

Correct AnswerverifiedShow Answer

Unlike minimum wage laws,wage subsidies

Correct AnswerverifiedShow Answer

A tax on buyers will shift the

Correct AnswerverifiedShow Answer

Figure 6-19 -If a tax is levied on the buyers of dog food,then

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-4 -Refer to Figure 6-4.A government-imposed price of $6 in this market is an example of a

Correct AnswerverifiedShow Answer

Economic policies often have effects that their architects did not intend or anticipate.

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

Correct AnswerverifiedShow Answer

Which of the following causes a surplus of a good?

Correct AnswerverifiedShow Answer

The term tax incidence refers to how the burden of a tax is distributed among the various people who make up the economy.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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