Question 1

When a tax is levied on sellers of tea,

Accepted Answer

A)  the well-being of both sellers and buyers of tea is unaffected.
B)  sellers of tea are made worse off, and the well-being of buyers is unaffected.
C)  sellers of tea are made worse off, and buyers of tea are made better off.
D)  both sellers and buyers of tea are made worse off.E) B) and C)
F) A) and D)

Question 2

A $5 tax levied on the buyers of pants will cause the

Accepted Answer

A)  supply curve for pants to shift down by $5.
B)  supply curve for pants to shift up by $5.
C)  demand curve for pants to shift down by $5.
D)  demand curve for pants to shift up by $5.E) All of the above
F) A) and C)

Question 3

If the equilibrium price of an airline ticket is $500 and the government imposes a price floor of $400 on airline tickets, then fewer airline tickets will be sold than at the market equilibrium.

Accepted Answer

A) True 
 B)False

Question 4

A $0.10 tax levied on the sellers of chocolate bars will cause the

Accepted Answer

A)  supply curve for chocolate bars to shift down by $0.10.
B)  supply curve for chocolate bars to shift up by $0.10.
C)  demand curve for chocolate bars to shift down by $0.10.
D)  demand curve for chocolate bars to shift up by $0.10.E) A) and B)
F) None of the above

Question 5

When policymakers set prices by legal decree, they obscure the signals that normally guide the allocation of society's resources.

Accepted Answer

A) True 
 B)False

Question 6

Price ceilings are typically imposed to benefit buyers.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following causes a surplus of a good?

Accepted Answer

A)  a binding price floor
B)  a binding price ceiling
C)  a tax on the good
D)  More than one of the above is correct.E) B) and C)
F) A) and D)

Question 8

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 8 units.
B)  $4 will be binding and will result in a shortage of 16 units.
C)  $7 will be binding and will result in a surplus of 4 units.
D)  $7 will be binding and will result in a surplus of 8 units.E) None of the above
F) All of the above

Question 9

Figure 6-25 
-Refer to Figure 6-25. Suppose the same supply and demand curves apply, and a tax of the same amount per unit as shown here is imposed. Now, however, the sellers of the good, rather than the buyers, are required to pay the tax to the government. After the sellers are required to pay the tax, relative to the case depicted in the graph, the burden on buyers will be

Accepted Answer

A)  larger, and the burden on sellers will be smaller.
B)  smaller, and the burden on sellers will be larger.
C)  the same, and the burden on sellers will be the same.
D)  The relative burdens in the two cases cannot be determined without further information.E) All of the above
F) B) and D)

Question 10

A price ceiling will be binding only if it is set

Accepted Answer

A)  equal to the equilibrium price.
B)  above the equilibrium price.
C)  below the equilibrium price.
D)  either above or below the equilibrium price.E) None of the above
F) A) and D)

Question 11

If the demand curve is more price elastic than the supply curve in a particular market, will the buyers or the sellers bear a larger burden of a per-unit tax imposed on the market?

Accepted Answer

The sellers will bea...

Question 12

​The distribution of the burden of a tax depends strictly on the elasticity of supply.

Accepted Answer

A) True 
 B)False

Question 13

A binding minimum wage creates a surplus of labor.

Accepted Answer

A) True 
 B)False

Question 14

A legal maximum on the price at which a good can be sold is called a price

Accepted Answer

A)  floor.
B)  subsidy.
C)  support.
D)  ceiling.E) B) and C)
F) All of the above

Question 15

Price controls are usually enacted when policymakers believe that the market price of a good or service is unfair to buyers or sellers.

Accepted Answer

A) True 
 B)False

Question 16

When a binding price ceiling is imposed on a market,

Accepted Answer

A)  price no longer serves as a rationing device.
B)  the quantity supplied at the price ceiling exceeds the quantity that would have been supplied without the price ceiling.
C)  all buyers benefit.
D)  All of the above are correct.E) B) and D)
F) All of the above

Question 17

Figure 6-30
Panel (a) 
Panel (b)    Panel (c)  
-Refer to Figure 6-30. In which market will the tax burden be most equally divided between buyers and sellers?

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) None of the above
F) A) and D)

Question 18

​Price ceilings are never binding when set above the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 19

A price ceiling set below the equilibrium price is binding.

Accepted Answer

A) True 
 B)False

Question 20

When a binding price floor is imposed on a market to benefit sellers,

Accepted Answer

A)  no sellers actually benefit.
B)  some sellers benefit, but no sellers are harmed.
C)  some sellers benefit, and some sellers are harmed.
D)  all sellers benefit.E) A) and B)
F) C) and D)

Exam 6: Supply, Demand, and Government Policies

When a binding price ceiling is imposed on a market,

Correct Answer
verified

A price ceiling will be binding only if it is set

Correct Answer
verified

The distribution of the burden of a tax depends strictly on the elasticity of supply.

Correct Answer
verified

Correct Answer
verified

Figure 6-30 Panel (a) Panel (b) Panel (c) -Refer to Figure 6-30. In which market will the tax burden be most equally divided between buyers and sellers?

Correct Answer
verified

A binding minimum wage creates a surplus of labor.

Correct Answer
verified

Price ceilings are never binding when set above the equilibrium price.

Correct Answer
verified

If the equilibrium price of an airline ticket is $500 and the government imposes a price floor of $400 on airline tickets, then fewer airline tickets will be sold than at the market equilibrium.

Correct Answer
verified

Price ceilings are typically imposed to benefit buyers.

Correct Answer
verified

A $5 tax levied on the buyers of pants will cause the

Correct Answer
verified

A legal maximum on the price at which a good can be sold is called a price

Correct Answer
verified

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

Correct Answer
verified

A price ceiling set below the equilibrium price is binding.

Correct Answer
verified

When a tax is levied on sellers of tea,

Correct Answer
verified

A $0.10 tax levied on the sellers of chocolate bars will cause the

Correct Answer
verified

When policymakers set prices by legal decree, they obscure the signals that normally guide the allocation of society's resources.

Correct Answer
verified

When a binding price floor is imposed on a market to benefit sellers,

Correct Answer
verified

Which of the following causes a surplus of a good?

Correct Answer
verified

If the demand curve is more price elastic than the supply curve in a particular market, will the buyers or the sellers bear a larger burden of a per-unit tax imposed on the market?

Correct Answer
verified
The sellers will bea...
View Answer

Price controls are usually enacted when policymakers believe that the market price of a good or service is unfair to buyers or sellers.

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

When a binding price ceiling is imposed on a market,

Correct AnswerverifiedShow Answer

A price ceiling will be binding only if it is set

Correct AnswerverifiedShow Answer

​The distribution of the burden of a tax depends strictly on the elasticity of supply.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 6-30 Panel (a) Panel (b) Panel (c) -Refer to Figure 6-30. In which market will the tax burden be most equally divided between buyers and sellers?

Correct AnswerverifiedShow Answer

A binding minimum wage creates a surplus of labor.

Correct AnswerverifiedShow Answer

​Price ceilings are never binding when set above the equilibrium price.

Correct AnswerverifiedShow Answer

If the equilibrium price of an airline ticket is $500 and the government imposes a price floor of $400 on airline tickets, then fewer airline tickets will be sold than at the market equilibrium.

Correct AnswerverifiedShow Answer

Price ceilings are typically imposed to benefit buyers.

Correct AnswerverifiedShow Answer

A $5 tax levied on the buyers of pants will cause the

Correct AnswerverifiedShow Answer

A legal maximum on the price at which a good can be sold is called a price

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A price ceiling set below the equilibrium price is binding.

Correct AnswerverifiedShow Answer

When a tax is levied on sellers of tea,

Correct AnswerverifiedShow Answer

A $0.10 tax levied on the sellers of chocolate bars will cause the

Correct AnswerverifiedShow Answer

When policymakers set prices by legal decree, they obscure the signals that normally guide the allocation of society's resources.

Correct AnswerverifiedShow Answer

When a binding price floor is imposed on a market to benefit sellers,

Correct AnswerverifiedShow Answer

Which of the following causes a surplus of a good?

Correct AnswerverifiedShow Answer

If the demand curve is more price elastic than the supply curve in a particular market, will the buyers or the sellers bear a larger burden of a per-unit tax imposed on the market?

Correct AnswerverifiedThe sellers will bea...View AnswerShow Answer

Price controls are usually enacted when policymakers believe that the market price of a good or service is unfair to buyers or sellers.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

The distribution of the burden of a tax depends strictly on the elasticity of supply.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Price ceilings are never binding when set above the equilibrium price.

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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The sellers will bea...
View Answer

Correct Answer
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