Question 1

Suppose the equilibrium price of a physical examination ("physical")  by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling,

Accepted Answer

A)   the quantity of physicals demanded increases.
B)   there is shortage of physicals.
C)   the quantity of physicals supplied decreases.
D)   All of the above are correct.E) B) and C)
F) All of the above

Question 2

Suppose there is currently a tax of $50 per ticket on airline tickets. Sellers 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 D)
F) C) and D)

Question 3

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

Accepted Answer

A binding price floo...

Question 4

Which of the following is not correct?

Accepted Answer

A)   Some states in the U.S. mandate minimum wages above the federal level.
B)   Most European nations have minimum-wage laws.
C)   The U.S. minimum wage is significantly higher than the minimum wages in France and the United Kingdom.
D)   The U.S. Congress first instituted a minimum wage with the Fair Labor Standards Act.E) A) and B)
F) A) and C)

Question 5

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 floor at $13, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at...

Question 6

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) B) and C)
F) None of the above

Question 7

A price ceiling set below the equilibrium price causes quantity demanded to exceed quantity supplied.

Accepted Answer

A) True 
 B)False

Question 8

A tax levied on the sellers of blueberries

Accepted Answer

A)   increases sellers' costs, reduces profits, and shifts the supply curve up.
B)   increases sellers' costs, reduces profits, and shifts the supply curve down.
C)   decreases sellers' costs, increases profits, and shifts the supply curve up.
D)   decreases sellers' costs, increases profits, and shifts the supply curve down.E) None of the above
F) A) and B)

Question 9

Price floors are typically imposed to benefit buyers.

Accepted Answer

A) True 
 B)False

Question 10

A tax of $1 on sellers shifts the supply curve upward by exactly $1.

Accepted Answer

A) True 
 B)False

Question 11

Figure 6-34 
-Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how much is the burden of the tax on the buyers in this market?

Accepted Answer

With a $6 tax per unit, the pr...

Question 12

Figure 6-18
The vertical distance between points A and B represents the tax in the market. 
-Refer to Figure 6-18. The price that buyers pay after the tax is imposed is

Accepted Answer

A)   $8.
B)   $10.
C)   $16.
D)   $24.E) A) and B)
F) None of the above

Question 13

Figure 6-13
This figure shows the market demand and market supply curves for good X. 
-Refer to Figure 6-13. Which of the following statements is correct?

Accepted Answer

A)   A price ceiling set at $6 would be binding, but a price ceiling set at $4 would not be binding.
B)   A price floor set at $4 would be binding, but a price ceiling set at $4 would not be binding.
C)   A price ceiling set at $3.50 would result in a surplus.
D)   A price floor set at $6.50 would result in a surplus.E) B) and D)
F) A) and D)

Question 14

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

Question 15

A tax on the sellers of coffee will increase the price of coffee paid by buyers,

Accepted Answer

A)   increase the effective price of coffee received by sellers, and increase the equilibrium quantity of coffee.
B)   increase the effective price of coffee received by sellers, and decrease the equilibrium quantity of coffee.
C)   decrease the effective price of coffee received by sellers, and increase the equilibrium quantity of coffee.
D)   decrease the effective price of coffee received by sellers, and decrease the equilibrium quantity of coffee.E) A) and C)
F) None of the above

Question 16

A price floor set above the equilibrium price is not binding.

Accepted Answer

A) True 
 B)False

Question 17

Figure 6-24 
-Refer to Figure 6-24. Andrew is a buyer of the good. Taking the tax into account, how much does Andrew effectively pay to acquire one unit of the good?

Accepted Answer

A)   $16
B)   $18
C)   $24
D)   $26E) B) and D)
F) C) and D)

Question 18

Figure 6-33 
-Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the buyers in this market?

Accepted Answer

The burden...

Question 19

In response to a shortage caused by the imposition of a binding price ceiling on a market,

Accepted Answer

A)   price will no longer be the mechanism that rations scarce resources.
B)   long lines of buyers may develop.
C)   sellers could ration the good or service according to their own personal biases.
D)   All of the above are correct.E) All of the above
F) A) and C)

Question 20

Table 6-4
The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price floor $3 above the equilibrium price in this market. 
-Refer to Table 6-4. How many units of the good are sold after the imposition of the price floor?

Accepted Answer

A)   3
B)   9
C)   15
D)   18E) B) and C)
F) A) and D)

Exam 6: Supply, Demand, and Government Policies

Figure 6-34 -Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how much is the burden of the tax on the buyers in this market?

Correct Answer
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With a $6 tax per unit, the pr...
View Answer

In response to a shortage caused by the imposition of a binding price ceiling on a market,

Correct Answer
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Which of the following is not correct?

Correct Answer
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A price floor set above the equilibrium price is not binding.

Correct Answer
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Price floors are typically imposed to benefit buyers.

Correct Answer
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A tax of $1 on sellers shifts the supply curve upward by exactly $1.

Correct Answer
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Suppose there is currently a tax of $50 per ticket on airline tickets. Sellers 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
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Figure 6-18 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-18. The price that buyers pay after the tax is imposed is

Correct Answer
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Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. Which of the following statements is correct?

Correct Answer
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Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling,

Correct Answer
verified

Figure 6-24 -Refer to Figure 6-24. Andrew is a buyer of the good. Taking the tax into account, how much does Andrew effectively pay to acquire one unit of the good?

Correct Answer
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Correct Answer
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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. If the government set a price floor at $13, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct Answer
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A price floor set at...
View Answer

A tax on the sellers of coffee will increase the price of coffee paid by buyers,

Correct Answer
verified

Unlike minimum wage laws, wage subsidies

Correct Answer
verified

A tax levied on the sellers of blueberries

Correct Answer
verified

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

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

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

Correct Answer
verified

Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the buyers in this market?

Correct Answer
verified
The burden...
View Answer

A price ceiling set below the equilibrium price causes quantity demanded to exceed quantity supplied.

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

Figure 6-34 -Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, how much is the burden of the tax on the buyers in this market?

Correct AnswerverifiedWith a $6 tax per unit, the pr...View AnswerShow Answer

In response to a shortage caused by the imposition of a binding price ceiling on a market,

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

A price floor set above the equilibrium price is not binding.

Correct AnswerverifiedShow Answer

Price floors are typically imposed to benefit buyers.

Correct AnswerverifiedShow Answer

A tax of $1 on sellers shifts the supply curve upward by exactly $1.

Correct AnswerverifiedShow Answer

Suppose there is currently a tax of $50 per ticket on airline tickets. Sellers 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

Figure 6-18 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-18. The price that buyers pay after the tax is imposed is

Correct AnswerverifiedShow Answer

Figure 6-13 This figure shows the market demand and market supply curves for good X. -Refer to Figure 6-13. Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling,

Correct AnswerverifiedShow Answer

Figure 6-24 -Refer to Figure 6-24. Andrew is a buyer of the good. Taking the tax into account, how much does Andrew effectively pay to acquire one unit of the good?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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 floor at $13, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedA price floor set at...View AnswerShow Answer

A tax on the sellers of coffee will increase the price of coffee paid by buyers,

Correct AnswerverifiedShow Answer

Unlike minimum wage laws, wage subsidies

Correct AnswerverifiedShow Answer

A tax levied on the sellers of blueberries

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedA binding price floo...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Figure 6-33 -Refer to Figure 6-33. Suppose a $3 per-unit tax is imposed on the sellers of this good. How much is the burden of this tax on the buyers in this market?

Correct AnswerverifiedThe burden...View AnswerShow Answer

A price ceiling set below the equilibrium price causes quantity demanded to exceed quantity supplied.

Correct AnswerverifiedShow Answer

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With a $6 tax per unit, the pr...
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A price floor set at...
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A binding price floo...
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The burden...
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