Question 1

Figure 6-19 
-Refer to Figure 6-19.Which of the following is correct?

Accepted Answer

A)   One-fourth of the burden of the tax falls on buyers,and three-fourths of the burden of the tax falls on sellers.
B)   One-third of the burden of the tax falls on buyers,and two-thirds of the burden of the tax falls on sellers.
C)   One-half of the burden of the tax falls on buyers,and one-half of the burden of the tax falls on sellers.
D)   Two-thirds of the burden of the tax falls on buyers,and one-third of the burden of the tax falls on sellers.E) A) and B)
F) A) and C)

Question 2

Suppose sellers of perfume are required to send $1.00 to the government for every bottle of perfume they sell.Further,suppose this tax causes the price paid by buyers of perfume to rise by $0.60 per bottle.Which of the following statements is correct?

Accepted Answer

A)   The effective price received by sellers is $0.40 per bottle less than it was before the tax.
B)   Sixty percent of the burden of the tax falls on sellers.
C)   This tax causes the demand curve for perfume to shift downward by $1.00 at each quantity of perfume.
D)   All of the above are correct.E) A) and C)
F) B) and C)

Question 3

The price paid by buyers in a market will increase if the government (i) increases a binding price floor in that market.
(ii) increases a binding price ceiling in that market.
(iii) decreases a tax on the good sold in that market.

Accepted Answer

A)   (ii) only
B)   (iii) only
C)   (i) and (ii) only
D)   (i) ,(ii) ,and (iii) E) B) and C)
F) C) and D)

Question 4

Figure 6-4 
-Refer to Figure 6-4.Which of the following statements is not correct?

Accepted Answer

A)   When the price is $10,quantity supplied equals quantity demanded.
B)   When the price is $6,there is a surplus of 8 units.
C)   When the price is $12,there is a surplus of 4 units.
D)   When the price is $16,quantity supplied exceeds quantity demanded by 12 units.E) All of the above
F) C) and D)

Question 5

Table 6-3
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 $2 above the equilibrium price in this market.
 
-Refer to Table 6-3.How many units of the good are sold after the imposition of the price floor?

Accepted Answer

A)   5
B)   9
C)   10
D)   15E) A) and B)
F) A) and C)

Question 6

If a tax is levied on the buyers of a product,then the demand curve will

Accepted Answer

A)   not shift.
B)   shift down.
C)   shift up.
D)   become flatter.E) A) and D)
F) None of the above

Question 7

Suppose sellers of liquor are required to send $1.00 to the government for every bottle of liquor they sell.Further,suppose this tax causes the price paid by buyers of liquor to rise by $0.80 per bottle.Which of the following statements is correct?

Accepted Answer

A)   This tax causes the supply curve for liquor to shift upward by $1.00 at each quantity of liquor.
B)   The effective price received by sellers is $0.20 per bottle less than it was before the tax.
C)   Eighty percent of the burden of the tax falls on buyers.
D)   All of the above are correct.E) C) and D)
F) A) and D)

Question 8

A binding price floor (i) causes a surplus.
(ii) causes a shortage.
(iii) is set at a price above the equilibrium price.
(iv) 
Is set at a price below the equilibrium price.

Accepted Answer

A)   (i) only
B)   (iii) only
C)   (i) and (iii) only
D)   (ii) and (iv) onlyE) A) and C)
F) A) and D)

Question 9

Suppose buyers of tequila are required to send $1.00 to the government for every bottle of tequila they buy.Further,suppose this tax causes the effective price received by sellers of tequila to fall by $0.80 per bottle.Which of the following statements is correct?

Accepted Answer

A)   This tax causes the demand curve for tequila to shift downward by $1.00 at each quantity of tequila.
B)   The price paid by buyers is $0.20 per bottle more than it was before the tax.
C)   Eighty percent of the burden of the tax falls on sellers.
D)   All of the above are correct.E) C) and D)
F) None of the above

Question 10

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 increase the price paid by buyers of picture frames by

Accepted Answer

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

Question 11

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

Accepted Answer

A)   is not binding.
B)   creates a surplus.
C)   creates a shortage.
D)   Both a) and b) are correct.E) All of the above
F) B) and C)

Question 12

The minimum wage is more often binding for teenagers than for other members of the labor force.

Accepted Answer

A) True 
 B)False

Question 13

The tax incidence depends on whether the tax is levied on buyers or sellers.

Accepted Answer

A) True 
 B)False

Question 14

Rent control

Accepted Answer

A)   serves as an example of how a social problem can be alleviated or even solved by government policies.
B)   serves as an example of a price ceiling.
C)   is regarded by most economists as an efficient way of helping the poor.
D)   is the most efficient way to allocate scarce housing resources.E) B) and C)
F) All of the above

Question 15

Figure 6-21 
-Refer to Figure 6-22.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) B) and D)
F) A) and B)

Question 16

The federal government uses the revenue from the FICA (Federal Insurance Contribution Act) tax to pay for

Accepted Answer

A)   unemployment compensation.
B)   the salaries of members of Congress.
C)   Social Security and Medicare.
D)   housing subsidies for low-income people.E) C) and D)
F) B) and D)

Question 17

Figure 6-6 
-Refer to Figure 6-6.Which of the following price floors would be binding in this market?

Accepted Answer

A)   $6
B)   $8
C)   $10
D)   $12E) A) and B)
F) A) and C)

Question 18

Suppose the government imposes a 50-cent tax on the sellers of packets of chewing gum.The tax would

Accepted Answer

A)   shift the supply curve upward by less than 50 cents.
B)   raise the equilibrium price by 50 cents.
C)   create a 50-cent tax burden each for buyers and sellers.
D)   discourage market activity.E) B) and C)
F) B) and D)

Question 19

A tax imposed on the buyers of a good will raise 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) None of the above
F) A) and B)

Question 20

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) B) and C)

Exam 6: Supply,demand,and Government Policies

Figure 6-19 -Refer to Figure 6-19.Which of the following is correct?

Correct Answer
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Suppose sellers of perfume are required to send $1.00 to the government for every bottle of perfume they sell.Further,suppose this tax causes the price paid by buyers of perfume to rise by $0.60 per bottle.Which of the following statements is correct?

Correct Answer
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Rent control

Correct Answer
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The federal government uses the revenue from the FICA (Federal Insurance Contribution Act) tax to pay for

Correct Answer
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A tax imposed on the buyers of a good will raise the

Correct Answer
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Figure 6-6 -Refer to Figure 6-6.Which of the following price floors would be binding in this market?

Correct Answer
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The tax incidence depends on whether the tax is levied on buyers or sellers.

Correct Answer
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Correct Answer
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If a tax is levied on the buyers of a product,then the demand curve will

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

Correct Answer
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A binding price floor (i) causes a surplus. (ii) causes a shortage. (iii) is set at a price above the equilibrium price. (iv) Is set at a price below the equilibrium price.

Correct Answer
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Suppose sellers of liquor are required to send $1.00 to the government for every bottle of liquor they sell.Further,suppose this tax causes the price paid by buyers of liquor to rise by $0.80 per bottle.Which of the following statements is correct?

Correct Answer
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Suppose buyers of tequila are required to send $1.00 to the government for every bottle of tequila they buy.Further,suppose this tax causes the effective price received by sellers of tequila to fall by $0.80 per bottle.Which of the following statements is correct?

Correct Answer
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The price paid by buyers in a market will increase if the government (i) increases a binding price floor in that market. (ii) increases a binding price ceiling in that market. (iii) decreases a tax on the good sold in that market.

Correct Answer
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Suppose the government imposes a 50-cent tax on the sellers of packets of chewing gum.The tax would

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 increase the price paid by buyers of picture frames by

Correct Answer
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The minimum wage is more often binding for teenagers than for other members of the labor force.

Correct Answer
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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
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Figure 6-4 -Refer to Figure 6-4.Which of the following statements is not correct?

Correct Answer
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Exam 6: Supply,demand,and Government Policies

Figure 6-19 -Refer to Figure 6-19.Which of the following is correct?

Correct AnswerverifiedShow Answer

Suppose sellers of perfume are required to send $1.00 to the government for every bottle of perfume they sell.Further,suppose this tax causes the price paid by buyers of perfume to rise by $0.60 per bottle.Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Rent control

Correct AnswerverifiedShow Answer

The federal government uses the revenue from the FICA (Federal Insurance Contribution Act) tax to pay for

Correct AnswerverifiedShow Answer

A tax imposed on the buyers of a good will raise the

Correct AnswerverifiedShow Answer

Figure 6-6 -Refer to Figure 6-6.Which of the following price floors would be binding in this market?

Correct AnswerverifiedShow Answer

The tax incidence depends on whether the tax is levied on buyers or sellers.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If a tax is levied on the buyers of a product,then the demand curve will

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A binding price floor (i) causes a surplus. (ii) causes a shortage. (iii) is set at a price above the equilibrium price. (iv) Is set at a price below the equilibrium price.

Correct AnswerverifiedShow Answer

Suppose sellers of liquor are required to send $1.00 to the government for every bottle of liquor they sell.Further,suppose this tax causes the price paid by buyers of liquor to rise by $0.80 per bottle.Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Suppose buyers of tequila are required to send $1.00 to the government for every bottle of tequila they buy.Further,suppose this tax causes the effective price received by sellers of tequila to fall by $0.80 per bottle.Which of the following statements is correct?

Correct AnswerverifiedShow Answer

The price paid by buyers in a market will increase if the government (i) increases a binding price floor in that market. (ii) increases a binding price ceiling in that market. (iii) decreases a tax on the good sold in that market.

Correct AnswerverifiedShow Answer

Suppose the government imposes a 50-cent tax on the sellers of packets of chewing gum.The tax would

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 increase the price paid by buyers of picture frames by

Correct AnswerverifiedShow Answer

The minimum wage is more often binding for teenagers than for other members of the labor force.

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

Figure 6-4 -Refer to Figure 6-4.Which of the following statements is not correct?

Correct AnswerverifiedShow Answer

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