Question 1

The term tax incidence refers to how the burden of a tax is distributed among the various people who make up the economy.

Accepted Answer

A) True 
 B)False

Question 2

Figure 6-28 
-Refer to Figure 6-28. Suppose a tax of $6 per unit is imposed on this market. How much will sellers receive per unit after the tax is imposed?

Accepted Answer

A)   $4
B)   between $4 and $7
C)   between $7 and $10
D)   $10

Question 3

Table 6-6
 
-Refer to Table 6-6. If the government set a price floor at $2, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at $2 would ...

Question 4

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.

Question 5

If the demand curve is more price elastic than the supply 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 sellers will bea...

Question 6

The wedge between the buyers' price and the sellers' price is the same, regardless of whether the tax is levied on buyers or sellers.

Accepted Answer

A) True 
 B)False

Question 7

A minimum wage that is set below a market's equilibrium wage will

Accepted Answer

A)   result in an excess demand for labor, that is, unemployment.
B)   result in an excess demand for labor, that is, a shortage of workers.
C)   result in an excess supply of labor, that is, unemployment.
D)   have no impact on employment.

Question 8

A tax imposed on the sellers 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 9

Figure 6-32 
-Refer to Figure 6-32. If the government set a price ceiling at $80, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price ceiling set at $80 wou...

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A)   $8.00.
B)   $9.00.
C)   $10.50.
D)   $12.00.

Question 12

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

Accepted Answer

A)   $70
B)   $60
C)   $5
D)   $40

Question 13

Taxes levied on sellers and taxes levied on buyers are equivalent.

Accepted Answer

A) True 
 B)False

Question 14

Figure 6-10 
-Refer to Figure 6-10. A price floor set at

Accepted Answer

A)   $6 will be binding and will result in a surplus of 10 units.
B)   $6 will be binding and will result in a surplus of 6 units.
C)   $16 will be binding and will result in a surplus of 10 units.
D)   $16 will be binding and will result in a surplus of 4 units.

Question 15

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

Accepted Answer

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

Question 16

Figure 6-3
Panel a)  Panel b) 
  
-Refer to Figure 6-3. In panel a) , there will be

Accepted Answer

A)   a shortage.
B)   equilibrium in the market.
C)   a surplus.
D)   lines of people waiting to buy the good.

Question 17

Figure 6-25 
-Refer to Figure 6-25. As the figure is drawn, who sends the tax payment to the government?

Accepted Answer

A)   The buyers send the tax payment.
B)   The sellers send the tax payment.
C)   A portion of the tax payment is sent by the buyers, and the remaining portion is sent by the sellers.
D)   The question of who sends the tax payment cannot be determined from the figure.

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

Figure 6-22 
-Refer to Figure 6-22. Suppose the same supply and demand curves apply, and a tax of the same amount per unit as shown here is imposed. Now, however, the buyers of the good, rather than the sellers, are required to pay the tax to the government. After the buyers pay the tax, relative to the case depicted in the figure, the burden on buyers will be

Accepted Answer

A)   larger, and the burden on sellers will be smaller.
B)   smaller, and the burden on sellers will be larger.
C)   the same, and the burden on sellers will be the same.
D)   The relative burdens in the two cases cannot be determined without further information.

Question 20

Minimum-wage laws are precise policy instruments that can specifically target workers whose family incomes are low.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

Taxes levied on sellers and taxes levied on buyers are equivalent.

Correct Answer
verified

The term tax incidence refers to how the burden of a tax is distributed among the various people who make up the economy.

Correct Answer
verified

Figure 6-10 -Refer to Figure 6-10. A price floor set at

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

A minimum wage that is set below a market's equilibrium wage will

Correct Answer
verified

Figure 6-32 -Refer to Figure 6-32. If the government set a price ceiling at $80, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct Answer
verified
A price ceiling set at $80 wou...
View Answer

Figure 6-3 Panel a) Panel b) -Refer to Figure 6-3. In panel a) , there will be

Correct Answer
verified

Table 6-6 -Refer to Table 6-6. If the government set a price floor at $2, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct Answer
verified
A price floor set at $2 would ...
View Answer

Figure 6-28 -Refer to Figure 6-28. Suppose a tax of $6 per unit is imposed on this market. How much will sellers receive per unit after the tax is imposed?

Correct Answer
verified

If the demand curve is more price elastic than the supply 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 Answer
verified
The sellers will bea...
View Answer

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

Correct Answer
verified

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

Correct Answer
verified

The wedge between the buyers' price and the sellers' price is the same, regardless of whether the tax is levied on buyers or sellers.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Figure 6-25 -Refer to Figure 6-25. As the figure is drawn, who sends the tax payment to the government?

Correct Answer
verified

A tax imposed on the sellers of a good will

Correct Answer
verified

Minimum-wage laws are precise policy instruments that can specifically target workers whose family incomes are low.

Correct Answer
verified

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

Correct Answer
verified

Exam 6: Supply, Demand, and Government Policies

Taxes levied on sellers and taxes levied on buyers are equivalent.

Correct AnswerverifiedShow Answer

The term tax incidence refers to how the burden of a tax is distributed among the various people who make up the economy.

Correct AnswerverifiedShow Answer

Figure 6-10 -Refer to Figure 6-10. A price floor set at

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

A minimum wage that is set below a market's equilibrium wage will

Correct AnswerverifiedShow Answer

Figure 6-32 -Refer to Figure 6-32. If the government set a price ceiling at $80, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedA price ceiling set at $80 wou...View AnswerShow Answer

Figure 6-3 Panel a) Panel b) -Refer to Figure 6-3. In panel a) , there will be

Correct AnswerverifiedShow Answer

Table 6-6 -Refer to Table 6-6. If the government set a price floor at $2, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedA price floor set at $2 would ...View AnswerShow Answer

Figure 6-28 -Refer to Figure 6-28. Suppose a tax of $6 per unit is imposed on this market. How much will sellers receive per unit after the tax is imposed?

Correct AnswerverifiedShow Answer

If the demand curve is more price elastic than the supply 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 sellers will bea...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The wedge between the buyers' price and the sellers' price is the same, regardless of whether the tax is levied on buyers or sellers.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Figure 6-25 -Refer to Figure 6-25. As the figure is drawn, who sends the tax payment to the government?

Correct AnswerverifiedShow Answer

A tax imposed on the sellers of a good will

Correct AnswerverifiedShow Answer

Minimum-wage laws are precise policy instruments that can specifically target workers whose family incomes are low.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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A price ceiling set at $80 wou...
View Answer

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A price floor set at $2 would ...
View Answer

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The sellers will bea...
View Answer

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