Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

A price ceiling is a legal minimum on the price at which a good or service can be sold.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Figure 6-13 
-Refer to Figure 6-13.In this market,a minimum wage of $2.75 is

Accepted Answer

A)   binding and creates a labor shortage.
B)   binding and creates unemployment.
C)   nonbinding and creates a labor shortage.
D)   nonbinding and creates neither a labor shortage nor unemployment.E) A) and B)
F) A) and C)

Question 5

If a price ceiling of $2 per gallon is imposed on gasoline,and the market equilibrium price is $1.50,then the price ceiling is a binding constraint on the market.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following causes the price paid by buyers to be different than the price received by sellers?

Accepted Answer

A)   a binding price floor
B)   a binding price ceiling
C)   a tax on the good
D)   All of the above are correct.E) B) and C)
F) A) and B)

Question 7

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

Accepted Answer

A)   A price ceiling set at $8 would be binding,but a price ceiling set at $12 would not be binding.
B)   A price floor set at $14 would be binding,but a price floor set at $8 would not be binding.
C)   A price ceiling set at $9 would result in a surplus.
D)   A price floor set at $11 would result in a surplus.E) A) and C)
F) A) and D)

Question 8

If the government passes a law requiring sellers of mopeds to send $200 to the government for every moped they sell,then

Accepted Answer

A)   the supply curve for mopeds shifts downward by $200.
B)   sellers of mopeds receive $200 less per mopeds than they were receiving before the tax.
C)   buyers of mopeds are unaffected by the tax.
D)   None of the above is correct.E) None of the above
F) A) and B)

Question 9

Figure 6-23 
-Refer to Figure 6-23.The amount of the tax per unit is

Accepted Answer

A)   $4.
B)   $5.
C)   $6.
D)   $10.E) B) and C)
F) A) and D)

Question 10

Suppose the government imposes a 20-cent tax on the sellers of artificially-sweetened beverages.The tax would shift

Accepted Answer

A)   demand,raising both the equilibrium price and quantity in the market for artificially-sweetened beverages.
B)   demand,lowering the equilibrium price and raising the equilibrium quantity in the market for artificially-sweetened beverages.
C)   supply,raising the equilibrium price and lowering the equilibrium quantity in the market for artificially-sweetened beverages.
D)   supply,lowering the equilibrium price and raising the equilibrium quantity in the market for artificially-sweetened beverages.E) B) and C)
F) A) and B)

Question 11

Figure 6-21 
-Refer to Figure 6-22.As the figure is drawn,who sends the tax payment to the government?

Accepted Answer

A)   The buyers send the tax payment.
B)   The sellers send the tax payment.
C)   A portion of the tax payment is sent by the buyers,and the remaining portion is sent by the sellers.
D)   The question of who sends the tax payment cannot be determined from the figure.E) None of the above
F) A) and D)

Question 12

In a free market,the price of housing adjusts to eliminate the shortages that give rise to undesirable landlord behavior.

Accepted Answer

A) True 
 B)False

Question 13

Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage depresses teenage employment by about

Accepted Answer

A)   1 to 3 percent.
B)   5 to 7 percent.
C)   10 percent.
D)   None of the above is correct because studies show no decrease in teenage employment.E) A) and D)
F) A) and B)

Question 14

A shortage results when a

Accepted Answer

A)   nonbinding price ceiling is imposed on a market.
B)   nonbinding price ceiling is removed from a market.
C)   binding price ceiling is imposed on a market.
D)   binding price ceiling is removed from a market.E) C) and D)
F) B) and C)

Question 15

If the government removes a $1 tax on sellers of gasoline and imposes the same $1 tax on buyers of gasoline,then the price paid by buyers will

Accepted Answer

A)   increase,and the price received by sellers will increase.
B)   increase,and the price received by sellers will not change.
C)   not change,and the price received by sellers will increase.
D)   not change,and the price received by sellers will not change.E) B) and D)
F) A) and B)

Question 16

Figure 6-4 
-Refer to Figure 6-4.A government-imposed price of $16 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 C)
F) B) and D)

Question 17

If a binding price ceiling is imposed on the baby formula market,then

Accepted Answer

A)   the quantity of baby formula demanded will increase.
B)   the quantity of baby formula supplied will decrease.
C)   a shortage of baby formula will develop.
D)   All of the above are correct.E) C) and D)
F) A) and B)

Question 18

You receive a paycheck from your employer,and your pay stub indicates that $300 was deducted to pay the FICA (Social Security/Medicare) tax.Which of the following statements is correct?

Accepted Answer

A)   The $300 that you paid is not necessarily the true burden of the tax that falls on you,the employee.
B)   Your employer is required by law to pay $300 to match the $300 deducted from your check.
C)   This type of tax is an example of a payroll tax.
D)   All of the above are correct.E) A) and B)
F) B) and C)

Question 19

When a payroll tax is enacted,the wage received by workers

Accepted Answer

A)   falls,and the wage paid by firms rises.
B)   falls,and the wage paid by firms falls.
C)   rises,and the wage paid by firms falls.
D)   rises,and the wage paid by firms rises.E) B) and C)
F) A) and D)

Question 20

Figure 6-12 1 to S2,the resulting quantity of gasoline that is bought and sold is A)  less than Q3. B)  Q3. C)  between Q1 and Q3. D)  at least Q1." class="answers-bank-image d-inline" rel="preload" >
-Refer to Figure 6-12.When the price ceiling applies in this market,and the supply curve for gasoline shifts from S1 to S2,the resulting quantity of gasoline that is bought and sold is

Accepted Answer

A)   less than Q3.
B)   Q3.
C)   between Q1 and Q3.
D)   at least Q1.E) B) and C)
F) A) and D)

Exam 6: Supply,demand,and Government Policies

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

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If the government removes a $1 tax on sellers of gasoline and imposes the same $1 tax on buyers of gasoline,then the price paid by buyers will

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

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Figure 6-4 -Refer to Figure 6-4.A government-imposed price of $16 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.

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You receive a paycheck from your employer,and your pay stub indicates that $300 was deducted to pay the FICA (Social Security/Medicare) tax.Which of the following statements is correct?

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Figure 6-12 -Refer to Figure 6-12.When the price ceiling applies in this market,and the supply curve for gasoline shifts from S1 to S2,the resulting quantity of gasoline that is bought and sold is

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If a binding price ceiling is imposed on the baby formula market,then

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Suppose the government imposes a 20-cent tax on the sellers of artificially-sweetened beverages.The tax would shift

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Figure 6-13 -Refer to Figure 6-13.In this market,a minimum wage of $2.75 is

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Figure 6-23 -Refer to Figure 6-23.The amount of the tax per unit is

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When a payroll tax is enacted,the wage received by workers

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If the government passes a law requiring sellers of mopeds to send $200 to the government for every moped they sell,then

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A price ceiling is a legal minimum on the price at which a good or service can be sold.

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A shortage results when a

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Figure 6-21 -Refer to Figure 6-22.As the figure is drawn,who sends the tax payment to the government?

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Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage depresses teenage employment by about

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

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In a free market,the price of housing adjusts to eliminate the shortages that give rise to undesirable landlord behavior.

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Which of the following causes the price paid by buyers to be different than the price received by sellers?

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If a price ceiling of $2 per gallon is imposed on gasoline,and the market equilibrium price is $1.50,then the price ceiling is a binding constraint on the market.

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Figure 6-12 -Refer to Figure 6-12.When the price ceiling applies in this market,and the supply curve for gasoline shifts from S₁ to S₂,the resulting quantity of gasoline that is bought and sold is

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