Question 1

The minimum wage

Accepted Answer

A)   is an example of a price ceiling.
B)   has its greatest impact on middle-aged and immigrant workers.
C)   does not apply to unpaid internships.
D)   does not affect the quantity of labor demanded; it only affects the quantity of labor supplied.E) B) and D)
F) A) and B)

Question 2

Figure 6-6 
-Refer to Figure 6-6.Which of the following statements is correct?

Accepted Answer

A)   A price ceiling set at $12 would be binding,but a price ceiling set at $8 would not be binding.
B)   A price floor set at $8 would be binding,but a price ceiling 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) B) and C)
F) A) and D)

Question 3

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

Accepted Answer

A)   more,and sellers receive more than they did before the tax.
B)   more,and sellers receive less than they did before the tax.
C)   less,and sellers receive more than they did before the tax.
D)   less,and sellers receive less than they did before the tax.E) B) and D)
F) All of the above

Question 4

Workers with high skills and much experience are not typically affected by the minimum wage.

Accepted Answer

A) True 
 B)False

Question 5

The tax incidence

Accepted Answer

A)   is the manner in which the burden of a tax is shared among participants in a market.
B)   can be shifted to the buyer by imposing the tax on the buyers of a product in a market.
C)   can be shifted to the seller by imposing the tax on the sellers of a product in a market.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 6

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

Accepted Answer

A)   $4
B)   $5
C)   $6
D)   $7E) None of the above
F) All of the above

Question 7

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

Question 8

Prices are inefficient rationing devices.

Accepted Answer

A) True 
 B)False

Question 9

If a price ceiling is a binding constraint on a market,then

Accepted Answer

A)   the equilibrium price must be below the price ceiling.
B)   the quantity supplied must exceed the quantity demanded.
C)   sellers cannot sell all they want to sell at the price ceiling.
D)   buyers cannot buy all they want to buy at the price ceiling.E) All of the above
F) B) and C)

Question 10

As rationing mechanisms,prices

Accepted Answer

A)   and long lines are efficient.
B)   are efficient,but long lines are inefficient.
C)   are inefficient,but long lines are efficient.
D)   and long lines are inefficient.E) B) and D)
F) A) and C)

Question 11

A price ceiling set above the equilibrium price causes a surplus in the market.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is the most likely explanation for the imposition of a price ceiling on the market for milk?

Accepted Answer

A)   Policymakers have studied the effects of the price ceiling carefully,and they recognize that the price ceiling is advantageous for society as a whole.
B)   Buyers of milk,recognizing that the price ceiling is good for them,have pressured policymakers into imposing the price ceiling.
C)   Sellers of milk,recognizing that the price ceiling is good for them,have pressured policymakers into imposing the price ceiling.
D)   Buyers and sellers of milk have agreed that the price ceiling is good for both of them and have therefore pressured policymakers into imposing the price ceiling.E) All of the above
F) C) and D)

Question 13

Figure 6-21 
-Refer to Figure 6-22.The burden of the tax on sellers is

Accepted Answer

A)   $1 per unit.
B)   $1.50 per unit.
C)   $2 per unit.
D)   $3 per unit.E) A) and C)
F) B) and C)

Question 14

Most of the burden of a luxury tax falls on the middle class workers who produce luxury goods rather than on the rich who buy them.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

A binding price floor may not help all sellers,but it does not hurt any sellers.

Accepted Answer

A) True 
 B)False

Question 17

Discrimination is an example of a rationing mechanism that may naturally develop in response to a binding price floor.

Accepted Answer

A) True 
 B)False

Question 18

A price ceiling set below the equilibrium price is binding.

Accepted Answer

A) True 
 B)False

Question 19

A tax on sellers increases the quantity of the good sold in the market.

Accepted Answer

A) True 
 B)False

Question 20

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 C)
F) A) and B)

Exam 6: Supply,demand,and Government Policies

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

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A binding price floor may not help all sellers,but it does not hurt any sellers.

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A price ceiling set below the equilibrium price is binding.

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A tax on sellers increases the quantity of the good sold in the market.

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

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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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Workers with high skills and much experience are not typically affected by the minimum wage.

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

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Discrimination is an example of a rationing mechanism that may naturally develop in response to a binding price floor.

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Which of the following is the most likely explanation for the imposition of a price ceiling on the market for milk?

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A price ceiling set above the equilibrium price causes a surplus in the market.

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As rationing mechanisms,prices

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The minimum wage

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If a price ceiling is a binding constraint on a market,then

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The tax incidence

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Figure 6-6 -Refer to Figure 6-6.Which of the following statements is correct?

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Suppose the government imposes a $40 tax on the buyers of refrigerators.The tax would

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Figure 6-21 -Refer to Figure 6-22.The burden of the tax on sellers is

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Prices are inefficient rationing devices.

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Most of the burden of a luxury tax falls on the middle class workers who produce luxury goods rather than on the rich who buy them.

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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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