Question 1

Congress intended that

Accepted Answer

A)  the entire FICA tax be paid by workers.
B)  the entire FICA tax be paid by firms.
C)  one-quarter of the FICA tax be paid by workers, and three-quarters be paid by firms.
D)  half the FICA tax be paid by workers, and half be paid by firms.E) B) and C)
F) A) and B)

Question 2

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) All of the above
F) B) and C)

Question 3

Figure 6-31 
-Refer to Figure 6-31. If the government set a price ceiling at $15, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price ceiling set at $15 wou...

Question 4

Because the supply and demand of housing are inelastic in the short run, the initial shortage caused by rent control is large.

Accepted Answer

A) True 
 B)False

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. What are the equilibrium price and quantity in the market for good X?

Accepted Answer

The equilibrium pric...

Question 6

Table 6-5 
-Refer to Table 6-5. Which of the following price floors would be binding in this market?

Accepted Answer

A)  $3
B)  $6
C)  $9
D)  None of the above price floors would be binding.E) All of the above
F) C) and D)

Question 7

Figure 6-25 
-Refer to Figure 6-25. How much tax revenue does this tax generate for the government?

Accepted Answer

A)  $150
B)  $180
C)  $250
D)  $300E) B) and C)
F) C) and D)

Question 8

Which of the following is not a result of rent control?

Accepted Answer

A)  fewer new apartments offered for rent
B)  less maintenance provided by landlords
C)  bribery
D)  higher quality housingE) All of the above
F) A) and B)

Question 9

Which of the following causes a shortage of a good?

Accepted Answer

A)  a binding price floor
B)  a binding price ceiling
C)  a tax on the good
D)  None of the above is correct.E) A) and B)
F) A) and C)

Question 10

Figure 6-31 
-Refer to Figure 6-31. If the government set a price floor at $15, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at...

Question 11

Minimum-wage laws dictate the lowest wage that firms may pay workers.

Accepted Answer

A) True 
 B)False

Question 12

The minimum wage has its greatest impact on the market for teenage labor.

Accepted Answer

A) True 
 B)False

Question 13

Figure 6-18
The vertical distance between points A and B represents the tax in the market. 
-Refer to Figure 6-18. The per-unit burden of the tax on sellers is

Accepted Answer

A)  $6.
B)  $8.
C)  $10.
D)  $14.E) B) and C)
F) B) and D)

Question 14

Figure 6-11 
-Refer to Figure 6-11. Which of the following statements is not correct?

Accepted Answer

A)  A government-imposed price of $8 would be a binding price floor if market demand is Demand A and a binding price ceiling if market demand is Demand B.
B)  A government-imposed price of $10 would be a binding price ceiling if market demand is either Demand A or Demand B.
C)  A government-imposed price of $4 would be a binding price ceiling if market demand is either Demand A or Demand B.
D)  A government-imposed price of $10 would be a binding price floor if market demand is Demand A and a non-binding price ceiling if market demand is Demand B.E) All of the above
F) A) and D)

Question 15

A tax on sellers shifts the supply curve to the left.

Accepted Answer

A) True 
 B)False

Question 16

​A shortage is eliminated when

Accepted Answer

A)  ​a binding price ceiling is removed.
B)  ​a binding price ceiling is enacted.
C)  ​a nonbinding price ceiling is repealed.
D)  ​a nonbinding price ceiling is imposed.E) B) and C)
F) A) and D)

Question 17

The goal of rent control is to help the poor by making housing more affordable.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

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

Question 19

If the supply curve is more price elastic than the demand 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 buyers will bear...

Question 20

Rent control policies tend to cause

Accepted Answer

A)  relatively smaller shortages in the short run than in the long run because supply and demand tends to be more elastic in the short run than in the long run.
B)  relatively larger shortages in the short run than in the long run because supply and demand tends to be more elastic in the short run than in the long run.
C)  relatively larger shortages in the short run than in the long run because supply and demand tends to be more inelastic in the short run than in the long run.
D)  relatively smaller shortages in the short run than in the long run because supply and demand tends to be more inelastic in the short run than in the long run.E) All of the above
F) A) and B)

Exam 6: Supply, Demand, and Government Policies

Figure 6-18 The vertical distance between points A and B represents the tax in the market. -Refer to Figure 6-18. The per-unit burden of the tax on sellers is

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Figure 6-11 -Refer to Figure 6-11. Which of the following statements is not correct?

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Figure 6-31 -Refer to Figure 6-31. If the government set a price floor at $15, would there be a shortage or surplus, and how large would be the shortage/surplus?

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

Congress intended that

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

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Minimum-wage laws dictate the lowest wage that firms may pay workers.

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Figure 6-25 -Refer to Figure 6-25. How much tax revenue does this tax generate for the government?

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The minimum wage has its greatest impact on the market for teenage labor.

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Rent control policies tend to cause

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

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Which of the following causes a shortage of a good?

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A tax on sellers shifts the supply curve to the left.

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The goal of rent control is to help the poor by making housing more affordable.

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Table 6-5 -Refer to Table 6-5. Which of the following price floors would be binding in this market?

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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. What are the equilibrium price and quantity in the market for good X?

Correct AnswerverifiedThe equilibrium pric...View AnswerShow Answer

Figure 6-31 -Refer to Figure 6-31. If the government set a price ceiling at $15, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedA price ceiling set at $15 wou...View AnswerShow Answer

Which of the following is not a result of rent control?

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If the supply curve is more price elastic than the demand 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 buyers will bear...View AnswerShow Answer

​A shortage is eliminated when

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Because the supply and demand of housing are inelastic in the short run, the initial shortage caused by rent control is large.

Correct AnswerverifiedShow Answer

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A price floor set at...
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The equilibrium pric...
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A price ceiling set at $15 wou...
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The buyers will bear...
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A shortage is eliminated when

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