Question 1

Minimum-wage laws dictate the lowest wage that firms may pay workers.

Accepted Answer

A) True 
 B)False

Question 2

Suppose that the demand for picture frames is highly inelastic, and the supply of picture frames is highly elastic. A tax of $1 per frame levied on picture frames will decrease the effective price received by sellers of picture frames by

Accepted Answer

A)   less than $0.50.
B)   $0.50.
C)   between $0.50 and $1.
D)   $1.E) All of the above
F) C) and D)

Question 3

The economy contains many labor markets for different types of workers.

Accepted Answer

A) True 
 B)False

Question 4

If the demand curve is very inelastic and the supply curve is very elastic in a market, then the sellers will bear a greater burden of a tax imposed on the market, even if the tax is imposed on the buyers.

Accepted Answer

A) True 
 B)False

Question 5

When a price ceiling is binding, is the price ceiling set above or below the market equilibrium price?

Accepted Answer

A binding price ceil...

Question 6

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

Question 7

Figure 6-30
Panel (a)  Panel (b) 
   Panel (c)  
-Refer to Figure 6-30. In which market will the majority of the tax burden fall on buyers?

Accepted Answer

A)   the market shown in panel (a) .
B)   the market shown in panel (b) .
C)   the market shown in panel (c) .
D)   All of the above are correct.E) C) and D)
F) A) and B)

Question 8

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

Accepted Answer

A)   $8
B)   $5
C)   $6
D)   $7E) A) and D)
F) A) and C)

Question 9

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) All of the above
F) A) and B)

Question 10

The minimum wage has its greatest impact on the market for teenage labor.

Accepted Answer

A) True 
 B)False  True

Question 11

Figure 6-29
Suppose the government imposes a $2 on this market. 
-Refer to Figure 6-29. The buyers and sellers will bear an equal share of the tax burden if the demand is

Accepted Answer

A)   D1, and the supply is S1.
B)   D2, and the supply is S1.
C)   D1, and the supply is S2.
D)   D2, and the supply is S2.E) A) and C)
F) A) and B)

Question 12

If the government removes a tax on a good, then the quantity of the good sold will

Accepted Answer

A)   increase.
B)   decrease.
C)   not change.
D)   All of the above are possible.E) All of the above
F) A) and C) A

Question 13

Rent-control laws dictate

Accepted Answer

A)   the exact rent that landlords must charge tenants.
B)   a maximum rent that landlords may charge tenants.
C)   a minimum rent that landlords may charge tenants.
D)   both a minimum rent and a maximum rent that landlords may charge tenants.E) None of the above
F) C) and D)

Question 14

The price paid by buyers in a market will decrease if the government

Accepted Answer

A)   increases a binding price floor in that market.
B)   increases a binding price ceiling in that market.
C)   decreases a tax on the good sold in that market.
D)   All of the above are correct.E) B) and C)
F) A) and D)

Question 15

A tax of $1 on sellers always increases the equilibrium price by $1.

Accepted Answer

A) True 
 B)False

Question 16

Minimum wage laws

Accepted Answer

A)   may encourage some teenagers to drop out and take jobs.
B)   create labor shortages.
C)   have the greatest impact in the market for skilled labor.
D)   All of the above are correct.E) B) and C)
F) None of the above

Question 17

A tax on sellers increases supply.

Accepted Answer

A) True 
 B)False

Question 18

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

Question 19

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 B)
F) None of the above

Question 20

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. If the government set a price ceiling at $12, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price ceiling set at $12 wou...

Exam 6: Supply, Demand, and Government Policies

Minimum-wage laws dictate the lowest wage that firms may pay workers.

Correct Answer
verified

Suppose that the demand for picture frames is highly inelastic, and the supply of picture frames is highly elastic. A tax of $1 per frame levied on picture frames will decrease the effective price received by sellers of picture frames by

Correct Answer
verified

The economy contains many labor markets for different types of workers.

Correct Answer
verified

If the demand curve is very inelastic and the supply curve is very elastic in a market, then the sellers will bear a greater burden of a tax imposed on the market, even if the tax is imposed on the buyers.

Correct Answer
verified

When a price ceiling is binding, is the price ceiling set above or below the market equilibrium price?

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

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?

Correct Answer
verified

Figure 6-30 Panel (a) Panel (b) Panel (c) -Refer to Figure 6-30. In which market will the majority of the tax burden fall on buyers?

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

The minimum wage has its greatest impact on the market for teenage labor.

Correct Answer
verified
True

Figure 6-29 Suppose the government imposes a $2 on this market. -Refer to Figure 6-29. The buyers and sellers will bear an equal share of the tax burden if the demand is

Correct Answer
verified

If the government removes a tax on a good, then the quantity of the good sold will

Correct Answer
verified
A

Rent-control laws dictate

Correct Answer
verified

The price paid by buyers in a market will decrease if the government

Correct Answer
verified

A tax of $1 on sellers always increases the equilibrium price by $1.

Correct Answer
verified

Minimum wage laws

Correct Answer
verified

A tax on sellers increases supply.

Correct Answer
verified

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

Correct Answer
verified
C

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

Correct Answer
verified

Correct Answer
verified
A price ceiling set at $12 wou...
View Answer

Exam 6: Supply, Demand, and Government Policies

Minimum-wage laws dictate the lowest wage that firms may pay workers.

Correct AnswerverifiedShow Answer

Suppose that the demand for picture frames is highly inelastic, and the supply of picture frames is highly elastic. A tax of $1 per frame levied on picture frames will decrease the effective price received by sellers of picture frames by

Correct AnswerverifiedShow Answer

The economy contains many labor markets for different types of workers.

Correct AnswerverifiedShow Answer

If the demand curve is very inelastic and the supply curve is very elastic in a market, then the sellers will bear a greater burden of a tax imposed on the market, even if the tax is imposed on the buyers.

Correct AnswerverifiedShow Answer

When a price ceiling is binding, is the price ceiling set above or below the market equilibrium price?

Correct AnswerverifiedA binding price ceil...View AnswerShow Answer

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?

Correct AnswerverifiedShow Answer

Figure 6-30 Panel (a) Panel (b) Panel (c) -Refer to Figure 6-30. In which market will the majority of the tax burden fall on buyers?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The minimum wage has its greatest impact on the market for teenage labor.

Correct AnswerverifiedTrue

Figure 6-29 Suppose the government imposes a $2 on this market. -Refer to Figure 6-29. The buyers and sellers will bear an equal share of the tax burden if the demand is

Correct AnswerverifiedShow Answer

If the government removes a tax on a good, then the quantity of the good sold will

Correct AnswerverifiedA

Rent-control laws dictate

Correct AnswerverifiedShow Answer

The price paid by buyers in a market will decrease if the government

Correct AnswerverifiedShow Answer

A tax of $1 on sellers always increases the equilibrium price by $1.

Correct AnswerverifiedShow Answer

Minimum wage laws

Correct AnswerverifiedShow Answer

A tax on sellers increases supply.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedC

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA price ceiling set at $12 wou...View AnswerShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
True

Correct Answer
verified

Correct Answer
verified
A

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
C

Correct Answer
verified

Correct Answer
verified
A price ceiling set at $12 wou...
View Answer