Question 1

In a particular market, market demand is given by the equation  
and market supply is given by the equation  
Suppose a per-unit tax is imposed that reduces the number of units bought and sold in the market to 25 units. What is the size of the tax, and who bears the greater burden of the tax, buyers or sellers?

Accepted Answer

If the number of transactions falls to 2...

Question 2

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 3

​Rent controls can cause

Accepted Answer

A)  ​a decline in the quality of housing available for rent.
B)  ​the development of a black market to allocate apartments to renters.
C)  ​longer search times for renters attempting to locate an apartment.
D)  ​all of these are possible results of rent controls.E) A) and B)
F) All of the above

Question 4

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

Question 5

Figure 6-1
Panel (a) 
Panel (b)   
-Refer to Figure 6-1. A binding price ceiling is shown in

Accepted Answer

A)  panel (a)  only.
B)  panel (b)  only.
C)  both panel (a)  and panel (b) .
D)  neither panel (a)  nor panel (b) .E) A) and C)
F) A) and B)

Question 6

Figure 6-11 
-Refer to Figure 6-11. If the government imposes a price floor at $10, it would be

Accepted Answer

A)  binding if market demand is Demand A or Demand B.
B)  non-binding if market demand is Demand A or Demand B.
C)  binding if market demand is Demand A and non-binding if market demand is Demand B.
D)  non-binding if market demand is Demand A and binding if market demand is Demand B.E) B) and C)
F) A) and B)

Question 7

Figure 6-23 
-Refer to Figure 6-23. The effective price received by sellers after the tax is imposed is

Accepted Answer

A)  $3.
B)  $4.
C)  $5.
D)  $6.E) All of the above
F) A) and D)

Question 8

Figure 6-14 
-Refer to Figure 6-14. If the horizontal line on the graph represents a price floor, then the price floor is

Accepted Answer

A)  binding and creates a shortage of 20 units of the good.
B)  binding and creates a shortage of 40 units of the good.
C)  not binding but creates a shortage of 40 units of the good.
D)  not binding, and there will be no surplus or shortage of the good.E) A) and D)
F) None of the above

Question 9

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.E) A) and C)
F) None of the above

Question 10

Discrimination is an example of a rationing mechanism that may naturally develop in response to a binding price floor.

Accepted Answer

A) True 
 B)False

Question 11

Figure 6-31 
-Refer to Figure 6-31. If the government set a price ceiling at $9, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

There woul...

Question 12

A tax on sellers reduces the size of a market.

Accepted Answer

A) True 
 B)False

Question 13

Figure 6-27
This figure shows the market demand and market supply curves for good Z. 
-Refer to Figure 6-27. Suppose a tax of $6 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Accepted Answer

A)  $16
B)  between $16 and $20
C)  between $20 and $22
D)  $22E) A) and C)
F) A) and D)

Question 14

In the United States, before OPEC increased the price of crude oil in 1973, there was

Accepted Answer

A)  no price ceiling on gasoline.
B)  a nonbinding price ceiling on gasoline.
C)  a binding price ceiling on gasoline.
D)  a nonbinding price floor on gasoline.E) A) and B)
F) C) and D)

Question 15

Figure 6-34 
-Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, what price will buyers pay per unit after the tax is imposed?

Accepted Answer

With a $6 tax per un...

Question 16

When OPEC raised the price of crude oil in the 1970s, it caused the United States'

Accepted Answer

A)  nonbinding price floor on gasoline to become binding.
B)  binding price floor on gasoline to become nonbinding.
C)  nonbinding price ceiling on gasoline to become binding.
D)  binding price ceiling on gasoline to become nonbinding.E) C) and D)
F) B) and D)

Question 17

Figure 6-24 
-Refer to Figure 6-24. The per-unit burden of the tax on buyers of the good is

Accepted Answer

A)  $2.
B)  $4.
C)  $6.
D)  $8.E) B) and C)
F) A) and D)

Question 18

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

Accepted Answer

A)  $6.
B)  $8.
C)  $14.
D)  $18.E) C) and D)
F) None of the above

Question 19

A tax burden falls more heavily on the side of the market that is less elastic.

Accepted Answer

A) True 
 B)False

Question 20

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 not correct?

Accepted Answer

A)  A price ceiling set at $4 would be binding, but a price ceiling set at $6 would not be binding.
B)  A price floor set at $7 would be binding, but a price floor 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) A) and B)
F) A) and C)

Exam 6: Supply, Demand, and Government Policies

Figure 6-24 -Refer to Figure 6-24. The per-unit burden of the tax on buyers of the good is

Correct Answer
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In the United States, before OPEC increased the price of crude oil in 1973, there was

Correct Answer
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Figure 6-34 -Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, what price will buyers pay per unit after the tax is imposed?

Correct Answer
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With a $6 tax per un...
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Figure 6-14 -Refer to Figure 6-14. If the horizontal line on the graph represents a price floor, then the price floor is

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Figure 6-23 -Refer to Figure 6-23. The effective price received by sellers after the tax is imposed is

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 amount of the tax per unit is

Correct Answer
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A tax burden falls more heavily on the side of the market that is less elastic.

Correct Answer
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Rent controls can cause

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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Correct Answer
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If the number of transactions falls to 2...
View Answer

Discrimination is an example of a rationing mechanism that may naturally develop in response to a binding price floor.

Correct Answer
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Figure 6-11 -Refer to Figure 6-11. If the government imposes a price floor at $10, it would be

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 not correct?

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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 Answer
verified
The equilibrium pric...
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A tax on sellers reduces the size of a market.

Correct Answer
verified

When a tax is levied on buyers of tea,

Correct Answer
verified

When OPEC raised the price of crude oil in the 1970s, it caused the United States'

Correct Answer
verified

Figure 6-1 Panel (a) Panel (b) -Refer to Figure 6-1. A binding price ceiling is shown in

Correct Answer
verified

Figure 6-31 -Refer to Figure 6-31. If the government set a price ceiling at $9, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct Answer
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There woul...
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Figure 6-27 This figure shows the market demand and market supply curves for good Z. -Refer to Figure 6-27. Suppose a tax of $6 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

Figure 6-24 -Refer to Figure 6-24. The per-unit burden of the tax on buyers of the good is

Correct AnswerverifiedShow Answer

In the United States, before OPEC increased the price of crude oil in 1973, there was

Correct AnswerverifiedShow Answer

Figure 6-34 -Refer to Figure 6-34. If the government imposes a tax of $6 per unit in this market, what price will buyers pay per unit after the tax is imposed?

Correct AnswerverifiedWith a $6 tax per un...View AnswerShow Answer

Figure 6-14 -Refer to Figure 6-14. If the horizontal line on the graph represents a price floor, then the price floor is

Correct AnswerverifiedShow Answer

Figure 6-23 -Refer to Figure 6-23. The effective price received by sellers after the tax is imposed is

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 amount of the tax per unit is

Correct AnswerverifiedShow Answer

A tax burden falls more heavily on the side of the market that is less elastic.

Correct AnswerverifiedShow Answer

​Rent controls can cause

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

Correct AnswerverifiedIf the number of transactions falls to 2...View AnswerShow Answer

Discrimination is an example of a rationing mechanism that may naturally develop in response to a binding price floor.

Correct AnswerverifiedShow Answer

Figure 6-11 -Refer to Figure 6-11. If the government imposes a price floor at $10, it would be

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 not correct?

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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

A tax on sellers reduces the size of a market.

Correct AnswerverifiedShow Answer

When a tax is levied on buyers of tea,

Correct AnswerverifiedShow Answer

When OPEC raised the price of crude oil in the 1970s, it caused the United States'

Correct AnswerverifiedShow Answer

Figure 6-1 Panel (a) Panel (b) -Refer to Figure 6-1. A binding price ceiling is shown in

Correct AnswerverifiedShow Answer

Figure 6-31 -Refer to Figure 6-31. If the government set a price ceiling at $9, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedThere woul...View AnswerShow Answer

Figure 6-27 This figure shows the market demand and market supply curves for good Z. -Refer to Figure 6-27. Suppose a tax of $6 per unit is imposed on this market. How much will buyers pay per unit after the tax is imposed?

Correct AnswerverifiedShow Answer

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With a $6 tax per un...
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Rent controls can cause

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If the number of transactions falls to 2...
View Answer

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Correct Answer
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The equilibrium pric...
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There woul...
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