Question 1

Which of the following causes a surplus of a good?

Accepted Answer

A)  a binding price floor
B)  a binding price ceiling
C)  a tax on the good
D)  More than one of the above is correct.

Question 2

A $3 tax levied on the buyers of shoes will cause the

Accepted Answer

A)  supply curve for shoes to shift down by $3.
B)  supply curve for shoes to shift up by $3.
C)  demand curve for shoes to shift down by $3.
D)  demand curve for shoes to shift up by $3.

Question 3

Which of the following is correct? Price controls

Accepted Answer

A)  always help those they are designed to help.
B)  never help those they are designed to help.
C)  often hurt those they are designed to help.
D)  always hurt those they are designed to help.

Question 4

Workers determine the supply of labor, and firms determine the demand for labor.

Accepted Answer

A) True 
 B)False

Question 5

The minimum wage

Accepted Answer

A)  is an example of a price ceiling.
B)  has its greatest impact on middle-aged and immigrant workers.
C)  does not apply to unpaid internships.
D)  does not affect the quantity of labor demanded; it only affects the quantity of labor supplied.

Question 6

If the government removes a binding price ceiling from a market, then the price received by sellers will

Accepted Answer

A)  decrease, and the quantity sold in the market will decrease.
B)  decrease, and the quantity sold in the market will increase.
C)  increase, and the quantity sold in the market will decrease.
D)  increase, and the quantity sold in the market will increase.

Question 7

Over time, housing shortages caused by rent control

Accepted Answer

A)  increase, because the demand for and supply of housing are less elastic in the long run.
B)  increase, because the demand for and supply of housing are more elastic in the long run.
C)  decrease, because the demand for and supply of housing are less elastic in the long run.
D)  decrease, because the demand for and supply of housing are more elastic in the long run.

Question 8

Table 6-1
   Price  Quantity  Denanded  Quantity  Sugplied $[12120$1102$284$366$448$5210$6012\begin{array} { | c | c | c | } \hline 	ext { Price } & \begin{array} { c } 	ext { Quantity } \	ext { Denanded }\end{array} & \begin{array} { c } 	ext { Quantity } \	ext { Sugplied }\end{array} \\hline \$ [ 12 & 12 & 0 \\hline \$ 1 & 10 & 2 \\hline \$ 2 & 8 & 4 \\hline \$ 3 & 6 & 6 \\hline \$ 4 & 4 & 8 \\hline \$ 5 & 2 & 10 \\hline \$ 6 & 0 & 12 \\hline\end{array} Price $[12$1$2$3$4$5$6​ Quantity  Denanded ​121086420​ Quantity  Sugplied ​024681012​​ 
-Refer to Table 6-1. Suppose the government imposes a price ceiling of $5 on this market. What will be the size of the shortage in this market?

Accepted Answer

A)  0 units
B)  2 units
C)  8 units
D)  10 units

Question 9

A shortage results when a

Accepted Answer

A)  nonbinding price ceiling is imposed on a market.
B)  nonbinding price ceiling is removed from a market.
C)  binding price ceiling is imposed on a market.
D)  binding price ceiling is removed from a market.

Question 10

Figure 6-24
Suppose the government imposes a $2 on this market. 
-Refer to Figure 6-24. Suppose D1 represents the demand curve for gasoline in both the short run and long run, S1 represents the supply curve for gasoline in the short run, and S2 represents the supply curve for gasoline in the long run. After the imposition of the $2, the price paid by buyers will be

Accepted Answer

A)  higher in the long run than in the short run.
B)  higher in the short run than in the long run.
C)  equivalent in the short run and the long run.
D)  unable to be determined without additional information.

Question 11

Suppose the equilibrium price of a physical examination ("physical")  by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling, the

Accepted Answer

A)  demand curve for physicals shifts to the right.
B)  supply curve for physicals shifts to the left.
C)  quantity demanded of physicals increases, and the quantity supplied of physicals decreases.
D)  number of physicals performed stays the same.

Question 12

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

Accepted Answer

A)  A price ceiling set at $8 would be binding, but a price ceiling set at $12 would not be binding.
B)  A price floor set at $14 would be binding, but a price floor set at $8 would not be binding.
C)  A price ceiling set at $9 would result in a surplus.
D)  A price floor set at $11 would result in a surplus.

Question 13

Suppose the government has imposed a price ceiling on laptop computers. Which of the following events could transform the price ceiling from one that is not binding into one that is binding?

Accepted Answer

A)  Improvements in production technology reduce the costs of producing laptop computers.
B)  The number of firms selling laptop computers decreases.
C)  Consumers' income decreases, and laptop computers are a normal good.
D)  The number of consumers buying laptop computers decreases.

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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 16

Other than OPEC, the shortage of gasoline in the U.S. in the 1970s could also be blamed on

Accepted Answer

A)  a sharp increase in the demand for gasoline that was brought on by the Vietnam War.
B)  the government's policy of maintaining a price ceiling on gasoline.
C)  an indifference among U.S. consumers toward conservation.
D)  the lack of substitutes for crude oil.

Question 17

The quantity sold in a market will increase if the government

Accepted Answer

A)  decreases a binding price floor in that market.
B)  increases a binding price ceiling in that market.
C)  decreases a tax on the good sold in that market.
D)  More than one of the above is correct.

Question 18

Minimum wage laws

Accepted Answer

A)  may encourage some teenagers to drop out and take jobs.
B)  create labor shortages.
C)  have the greatest impact in the market for skilled labor.
D)  All of the above are correct.

Question 19

A binding price ceiling causes a shortage in the market.

Accepted Answer

A) True 
 B)False

Question 20

When a tax is placed on the sellers of a product, the

Accepted Answer

A)  size of the market decreases.
B)  effective price received by sellers decreases, and the price paid by buyers increases.
C)  supply of the product decreases.
D)  All of the above are correct.

Exam 6: Supply, Demand, and Government Policies

Which of the following causes a surplus of a good?

Correct Answer
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The minimum wage

Correct Answer
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Suppose the government has imposed a price ceiling on laptop computers. Which of the following events could transform the price ceiling from one that is not binding into one that is binding?

Correct Answer
verified

When a tax is placed on the sellers of a product, the

Correct Answer
verified

Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling, the

Correct Answer
verified

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

Correct Answer
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Over time, housing shortages caused by rent control

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

Correct Answer
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Correct Answer
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The quantity sold in a market will increase if the government

Correct Answer
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A $3 tax levied on the buyers of shoes will cause the

Correct Answer
verified

Other than OPEC, the shortage of gasoline in the U.S. in the 1970s could also be blamed on

Correct Answer
verified

A shortage results when a

Correct Answer
verified

Correct Answer
verified

Workers determine the supply of labor, and firms determine the demand for labor.

Correct Answer
verified

Minimum wage laws

Correct Answer
verified

A binding price ceiling causes a shortage in the market.

Correct Answer
verified

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

Correct Answer
verified

Which of the following is correct? Price controls

Correct Answer
verified

If the government removes a binding price ceiling from a market, then the price received by sellers will

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

Which of the following causes a surplus of a good?

Correct AnswerverifiedShow Answer

The minimum wage

Correct AnswerverifiedShow Answer

Suppose the government has imposed a price ceiling on laptop computers. Which of the following events could transform the price ceiling from one that is not binding into one that is binding?

Correct AnswerverifiedShow Answer

When a tax is placed on the sellers of a product, the

Correct AnswerverifiedShow Answer

Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling, the

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Over time, housing shortages caused by rent control

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The quantity sold in a market will increase if the government

Correct AnswerverifiedShow Answer

A $3 tax levied on the buyers of shoes will cause the

Correct AnswerverifiedShow Answer

Other than OPEC, the shortage of gasoline in the U.S. in the 1970s could also be blamed on

Correct AnswerverifiedShow Answer

A shortage results when a

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Workers determine the supply of labor, and firms determine the demand for labor.

Correct AnswerverifiedShow Answer

Minimum wage laws

Correct AnswerverifiedShow Answer

A binding price ceiling causes a shortage in the market.

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

Which of the following is correct? Price controls

Correct AnswerverifiedShow Answer

If the government removes a binding price ceiling from a market, then the price received by sellers will

Correct AnswerverifiedShow Answer

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