Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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

Question 4

When a tax is placed on the buyers of cell phones,the size of the cell phone market

Accepted Answer

A)   and the effective price received by sellers both decrease.
B)   decreases, but the effective price received by sellers increases.
C)   increases, but the effective price received by sellers decreases.
D)   and the effective price received by sellers both increase.E) A) and D)
F) A) and C)

Question 5

Economic policies often have effects that their architects did not intend or anticipate.

Accepted Answer

A) True 
 B)False

Question 6

Figure 6-21
 
-Refer to Figure 6-22.The price that buyers pay after the tax is imposed is

Accepted Answer

A)   $5.
B)   $6.
C)   $7.
D)   $8.E) B) and C)
F) A) and C)

Question 7

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 8

Which of the following is not correct?

Accepted Answer

A)   Economists have two roles: scientist and policy adviser.
B)   As scientists, economists develop and test theories to explain the world around them.
C)   Economic policies rarely have effects that their architects did not intend or anticipate.
D)   As policy advisers, economists use their theories to help change the world for the better.E) B) and C)
F) All of the above

Question 9

If a price ceiling is not binding,then

Accepted Answer

A)   the equilibrium price is above the price ceiling.
B)   the equilibrium price is below the price ceiling.
C)   it has no legal enforcement mechanism.
D)   None of the above is correct because all price ceilings must be binding.E) B) and C)
F) C) and D)

Question 10

The housing shortages caused by rent control are larger in the long run than in the short run because both the supply of housing and the demand for housing are more elastic in the long run.

Accepted Answer

A) True 
 B)False

Question 11

If the government removes a tax on a good,then the quantity of the good sold will

Accepted Answer

A)   increase.
B)   decrease.
C)   not change.
D)   All of the above are possible.E) B) and C)
F) B) and D)

Question 12

Figure 6-17
 
-Refer to Figure 6-17.In the after-tax equilibrium,how much revenue does the government collect from the tax on this good?

Accepted Answer

A)   $210
B)   $345
C)   $420
D)   $480E) A) and B)
F) A) and C)

Question 13

An example of a price floor is

Accepted Answer

A)   the regulation of gasoline prices in the U.S. in the 1970s.
B)   rent control.
C)   the minimum wage.
D)   any restriction on price that leads to a shortage.E) A) and B)
F) All of the above

Question 14

Table 6-1
 
-Refer to Table 6-1.Which of the following price ceilings would be binding in this market?

Accepted Answer

A)   $2
B)   $3
C)   $4
D)   $5E) C) and D)
F) A) and D)

Question 15

Unlike minimum wage laws,wage subsidies

Accepted Answer

A)   discourage firms from hiring the working poor.
B)   cause unemployment.
C)   help only wealthy workers.
D)   raise the living standards of the working poor without creating unemployment.E) All of the above
F) B) and C)

Question 16

The primary effect of rent control in the short run is to reduce rents.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

An outcome that can result from either a price ceiling or a price floor is

Accepted Answer

A)   an enhancement of efficiency.
B)   undesirable rationing mechanisms.
C)   a surplus.
D)   a shortage.E) A) and D)
F) B) and D)

Question 19

Figure 6-16
 
-Refer to Figure 6-16.Suppose a tax of $5 per unit is imposed on this market.Which of the following is correct?

Accepted Answer

A)   Buyers and sellers will share the burden of the tax equally.
B)   Buyers will bear more of the burden of the tax than sellers will.
C)   Sellers will bear more of the burden of the tax than buyers will.
D)   Any of the above is possible.E) A) and C)
F) None of the above

Question 20

Suppose the government imposes a 25-cent tax on the buyers of incandescent light bulbs.Which of the following is not correct? The tax would

Accepted Answer

A)   shift the demand curve downward by 25 cents.
B)   lower the equilibrium price by 25 cents.
C)   reduce the equilibrium quantity.
D)   discourage market activity.E) B) and C)
F) All of the above

Exam 6: Supply, Demand, And Government Policies.

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

Correct AnswerverifiedShow Answer

The housing shortages caused by rent control are larger in the long run than in the short run because both the supply of housing and the demand for housing are more elastic in the long run.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If the government removes a tax on a good,then the quantity of the good sold will

Correct AnswerverifiedShow Answer

Suppose the government imposes a 25-cent tax on the buyers of incandescent light bulbs.Which of the following is not correct? The tax would

Correct AnswerverifiedShow Answer

Economic policies often have effects that their architects did not intend or anticipate.

Correct AnswerverifiedShow Answer

Table 6-1 -Refer to Table 6-1.Which of the following price ceilings would be binding in this market?

Correct AnswerverifiedShow Answer

An outcome that can result from either a price ceiling or a price floor is

Correct AnswerverifiedShow Answer

Figure 6-16 -Refer to Figure 6-16.Suppose a tax of $5 per unit is imposed on this market.Which of the following is correct?

Correct AnswerverifiedShow Answer

When a tax is placed on the buyers of cell phones,the size of the cell phone market

Correct AnswerverifiedShow Answer

If a price ceiling is not binding,then

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Unlike minimum wage laws,wage subsidies

Correct AnswerverifiedShow Answer

Which of the following is not correct?

Correct AnswerverifiedShow Answer

Figure 6-17 -Refer to Figure 6-17.In the after-tax equilibrium,how much revenue does the government collect from the tax on this good?

Correct AnswerverifiedShow Answer

Figure 6-21 -Refer to Figure 6-22.The price that buyers pay after the tax is imposed is

Correct AnswerverifiedShow Answer

The primary effect of rent control in the short run is to reduce rents.

Correct AnswerverifiedShow Answer

An example of a price floor is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified