Question 1

A tax on the sellers of coffee mugs

Accepted Answer

A)  increases the size of the coffee mug market.
B)  decreases the size of the coffee mug market.
C)  has no effect on the size of the coffee mug market.
D)  may increase, decrease, or have no effect on the size of the coffee mug market.

Question 2

​Suppose that a binding rent control law is repealed in San Francisco. As a result, we would expect the total number of units rented in the city to

Accepted Answer

A)  ​increase.
B)  ​decrease.
C)  ​remain unchanged.
D)  ​decrease, then increase.

Question 3

The burden of a luxury tax most likely falls more heavily on sellers because demand is more elastic and supply is more inelastic.

Accepted Answer

A) True 
 B)False

Question 4

A tax imposed on the buyers of a good will

Accepted Answer

A)  raise both the price buyers pay and the effective price sellers receive.
B)  raise the price buyers pay and lower the effective price sellers receive.
C)  lower the price buyers pay and raise the effective price sellers receive.
D)  lower both the price buyers pay and the effective price sellers receive.

Question 5

A binding price ceiling (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)  (ii)  only
B)  (iv)  only
C)  (i)  and (iii)  only
D)  (ii)  and (iv)  only

Question 6

When a tax is levied on buyers of tea,

Accepted Answer

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

Question 7

Who bears the majority of a tax burden depends on whether the tax is placed on the buyers or the sellers.

Accepted Answer

A) True 
 B)False

Question 8

Minimum-wage laws dictate

Accepted Answer

A)  the exact wage that firms must pay workers.
B)  a maximum wage that firms may pay workers.
C)  a minimum wage that firms may pay workers.
D)  both a minimum wage and a maximum wage that firms may pay workers.

Question 9

If a tax is levied on the buyers of a product, then there will be a(n)

Accepted Answer

A)  downward shift of the supply curve.
B)  upward shift of the supply curve.
C)  movement up and to the right along the supply curve.
D)  movement down and to the left along the supply curve.

Question 10

One common example of a price ceiling is rent control.

Accepted Answer

A) True 
 B)False

Question 11

Table 6-5 
-Refer to Table 6-5. Suppose the government imposes a price ceiling of $3 on this market. What will be the size of the shortage in this market?

Accepted Answer

A)  0 units
B)  30 units
C)  45 units
D)  75 units

Question 12

Rent subsidies and wage subsidies are better than price controls at helping the poor because they have no costs associated with them.

Accepted Answer

A) True 
 B)False

Question 13

A tax on the buyers of sofas

Accepted Answer

A)  increases the size of the sofa market.
B)  decreases the size of the sofa market.
C)  has no effect on the size of the sofa market.
D)  may increase, decrease, or have no effect on the size of the sofa market.

Question 14

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.

Question 15

The presence of a price control in a market for a good or service usually is an indication that

Accepted Answer

A)  an insufficient quantity of the good or service was being produced in that market to meet the public's need.
B)  the usual forces of supply and demand were not able to establish an equilibrium price in that market.
C)  policymakers believed that the price that prevailed in that market in the absence of price controls was unfair to buyers or sellers.
D)  policymakers correctly believed that price controls would generate no inequities of their own once imposed.

Question 16

Figure 6-6 
-Refer to Figure 6-6. If the government imposes a price ceiling of $6 on this market, then there will be

Accepted Answer

A)  no shortage.
B)  a shortage of 10 units.
C)  a shortage of 20 units.
D)  a shortage of 30 units.

Question 17

If the government removes a $2 tax on buyers of cigars and imposes the same $2 tax on sellers of cigars, then the price paid by buyers will

Accepted Answer

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

Question 18

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.

Question 19

In the short run, rent control causes the quantity supplied

Accepted Answer

A)  and quantity demanded to fall.
B)  to fall and quantity demanded to rise.
C)  to rise and quantity demanded to fall.
D)  and quantity demanded to rise.

Question 20

A payroll tax is a

Accepted Answer

A)  fixed number of dollars that every firm must pay to the government for each worker that the firm hires.
B)  tax that each firm must pay to the government before the firm can hire workers and operate its business.
C)  tax on the wages that firms pay their workers.
D)  tax on all wages above the minimum wage.

Exam 6: Supply, Demand, and Government Policies

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

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If a tax is levied on the buyers of a product, then there will be a(n)

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Table 6-5 -Refer to Table 6-5. Suppose the government imposes a price ceiling of $3 on this market. What will be the size of the shortage in this market?

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A binding price ceiling (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.

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One common example of a price ceiling is rent control.

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A tax on the buyers of sofas

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Minimum-wage laws dictate

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A tax levied on the sellers of blueberries

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A payroll tax is a

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Rent subsidies and wage subsidies are better than price controls at helping the poor because they have no costs associated with them.

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In the short run, rent control causes the quantity supplied

Correct AnswerverifiedShow Answer

If the government removes a $2 tax on buyers of cigars and imposes the same $2 tax on sellers of cigars, then the price paid by buyers will

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A tax imposed on the buyers of a good will

Correct AnswerverifiedShow Answer

Who bears the majority of a tax burden depends on whether the tax is placed on the buyers or the sellers.

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When a tax is levied on buyers of tea,

Correct AnswerverifiedShow Answer

A tax on the sellers of coffee mugs

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Figure 6-6 -Refer to Figure 6-6. If the government imposes a price ceiling of $6 on this market, then there will be

Correct AnswerverifiedShow Answer

The presence of a price control in a market for a good or service usually is an indication that

Correct AnswerverifiedShow Answer

​Suppose that a binding rent control law is repealed in San Francisco. As a result, we would expect the total number of units rented in the city to

Correct AnswerverifiedShow Answer

The burden of a luxury tax most likely falls more heavily on sellers because demand is more elastic and supply is more inelastic.

Correct AnswerverifiedShow Answer

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Suppose that a binding rent control law is repealed in San Francisco. As a result, we would expect the total number of units rented in the city to

Correct Answer
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Correct Answer
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