Question 1

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

Accepted Answer

A)   $6
B)   $5
C)   $4
D)   $3E) A) and B)
F) B) and D)

Question 2

Figure 6-18 
-Refer to Figure 6-18.How much tax revenue does this tax generate for the government?

Accepted Answer

A)   $75
B)   $125
C)   $175
D)   $300E) B) and D)
F) B) and C)

Question 3

Figure 6-9 
-Refer to Figure 6-9.A price floor 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) A) and D)
F) A) and B)

Question 4

Figure 6-20 
-Refer to Figure 6-20.What is the amount of the tax per unit?

Accepted Answer

A)   $8
B)   $6
C)   $4
D)   $2E) None of the above
F) C) and D)

Question 5

The proportion of minimum-wage earners who are in families with incomes below the poverty line is

Accepted Answer

A)   less than one-third.
B)   between one-third and one-half.
C)   between one-half and two-thirds.
D)   greater than two-thirds.E) A) and C)
F) B) and C)

Question 6

The Earned Income Tax Credit is an example of a

Accepted Answer

A)   minimum-wage law.
B)   price ceiling.
C)   wage subsidy.
D)   rent subsidy.E) All of the above
F) B) and D)

Question 7

A binding price ceiling may not help all consumers,but it does not hurt any consumers.

Accepted Answer

A) True 
 B)False

Question 8

A tax on the buyers of personal computer external hard drives encourages

Accepted Answer

A)   sellers to supply a smaller quantity at every price.
B)   buyers to demand a smaller quantity at every price.
C)   buyers to demand a larger quantity at every price.
D)   Both a and b are correct.E) B) and C)
F) A) and D)

Question 9

Figure 6-1

-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 10

When a tax is placed on the sellers of energy drinks,the

Accepted Answer

A)   sellers bear the entire burden of the tax.
B)   buyers bear the entire burden of the tax.
C)   burden of the tax will be always be equally divided between the buyers and the sellers.
D)   burden of the tax will be shared by the buyers and the sellers,but the division of the burden is not always equal.E) B) and D)
F) A) and D)

Question 11

The true burden of a payroll tax has nothing to do with the percentage of the tax that employers are required to pay.

Accepted Answer

A) True 
 B)False

Question 12

Lawmakers designed the burden of the FICA payroll tax to be split evenly between workers and firms.Labor economists believe that

Accepted Answer

A)   lawmakers may have actually achieved their goal because statistics show that the tax burden is currently equally divided.
B)   the tax raises too little revenue for the government,so it should be eliminated.
C)   firms bear most of the burden of the tax.
D)   workers bear most of the burden of the tax.E) B) and D)
F) None of the above

Question 13

Figure 6-6 
-Refer to Figure 6-6.If the government imposes a price ceiling of $12 on this market,then there will be

Accepted Answer

A)   no shortage.
B)   a shortage of 10 units.
C)   a shortage of 20 units.
D)   a shortage of 40 units.E) All of the above
F) A) and D)

Question 14

Figure 6-2
This figure shows the market demand and market supply curves for good X. 
-Refer to Figure 6-2.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) A) and B)

Question 15

In a free,competitive market,what is the rationing mechanism?

Accepted Answer

A)   seller bias
B)   buyer bias
C)   government law
D)   priceE) All of the above
F) B) and C)

Question 16

When a binding price ceiling is imposed on a market to benefit buyers,

Accepted Answer

A)   every buyer in the market benefits.
B)   every buyer and seller in the market benefits.
C)   every buyer who wants to buy the good will be able to do so,but only if he waits in long lines.
D)   some buyers will not be able to buy any amount of the good.E) B) and D)
F) B) and C)

Question 17

Scenario 6-1
Suppose that demand in the market for good X is given by the equation  and that supply in the market for good X is given by the equation 
-Refer to Scenario 6-1.What are the equilibrium price and quantity in the market for good X?

Accepted Answer

The equilibrium pric...

Question 18

Which of the following would be the most likely result of a binding price ceiling imposed on the market for rental cars?

Accepted Answer

A)   frequent rental programs such as "Rent nine times and the tenth rental is free!"
B)   enhanced maintenance programs to promote the high quality of the cars
C)   free gasoline given to people as an incentive to a rent a car
D)   slow replacement of old rental cars with newer onesE) All of the above
F) None of the above

Question 19

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 $12
C)   a price floor set at $8
D)   a price floor set at $12E) B) and C)
F) None of the above

Question 20

A price ceiling set below the equilibrium price is nonbinding.

Accepted Answer

A) True 
 B)False

Exam 6: Supply,demand,and Government Policies

Figure 6-2 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-2.If the government imposes a price ceiling of $4 on this market,then there will be

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Figure 6-6 -Refer to Figure 6-6.If the government imposes a price ceiling of $12 on this market,then there will be

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A tax on the buyers of personal computer external hard drives encourages

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Scenario 6-1 Suppose that demand in the market for good X is given by the equation and that supply in the market for good X is given by the equation -Refer to Scenario 6-1.What are the equilibrium price and quantity in the market for good X?

Correct AnswerverifiedThe equilibrium pric...View AnswerShow Answer

When a tax is placed on the sellers of energy drinks,the

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A price ceiling set below the equilibrium price is nonbinding.

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The true burden of a payroll tax has nothing to do with the percentage of the tax that employers are required to pay.

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The proportion of minimum-wage earners who are in families with incomes below the poverty line is

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Which of the following would be the most likely result of a binding price ceiling imposed on the market for rental cars?

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When a binding price ceiling is imposed on a market to benefit buyers,

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Lawmakers designed the burden of the FICA payroll tax to be split evenly between workers and firms.Labor economists believe that

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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?

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A binding price ceiling may not help all consumers,but it does not hurt any consumers.

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

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

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In a free,competitive market,what is the rationing mechanism?

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The Earned Income Tax Credit is an example of a

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

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Figure 6-18 -Refer to Figure 6-18.How much tax revenue does this tax generate for the government?

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Figure 6-20 -Refer to Figure 6-20.What is the amount of the tax per unit?

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The equilibrium pric...
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