Question 1

A tax on sellers shifts the supply curve but not the demand curve.

Accepted Answer

A) True 
 B)False

Question 2

A price floor is a legal minimum on the price at which a good or service can be sold.

Accepted Answer

A) True 
 B)False

Question 3

The goal of rent control is to

Accepted Answer

A)  facilitate controlled economic experiments in urban areas.
B)  help landlords by assuring them a low vacancy rate for their apartments.
C)  help the poor by assuring them an adequate supply of apartments.
D)  help the poor by making housing more affordable.E) B) and C)
F) A) and D)

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is correct?

Accepted Answer

A)  Rent control and the minimum wage are both examples of price ceilings.
B)  Rent control is an example of a price ceiling, and the minimum wage is an example of a price floor.
C)  Rent control is an example of a price floor, and the minimum wage is an example of a price ceiling.
D)  Rent control and the minimum wage are both examples of price floors.E) A) and B)
F) A) and C)

Question 6

A tax on golf clubs will cause buyers of golf clubs to pay a higher price, sellers of golf clubs to receive a lower price, and fewer golf clubs to be sold.

Accepted Answer

A) True 
 B)False  True

Question 7

Define a price ceiling.

Accepted Answer

A price ceiling is a...

Question 8

FICA is an example of a payroll tax, which is a tax on the wages that firms pay their workers.

Accepted Answer

A) True 
 B)False

Question 9

A tax on buyers decreases the quantity of the good sold in the market.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

Lawmakers can decide whether the buyers or the sellers must send a tax to the government, but they cannot legislate the true burden of a tax.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

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

Question 13

States in the U.S. may mandate minimum wages above the federal level.

Accepted Answer

A) True 
 B)False

Question 14

Figure 6-5
 
-Refer to Figure 6-5. Which of the following statements is not correct?

Accepted Answer

A)  When the price is $10, quantity supplied equals quantity demanded.
B)  When the price is $6, there is a surplus of 8 units.
C)  When the price is $12, there is a surplus of 4 units.
D)  When the price is $16, quantity supplied exceeds quantity demanded by 12 units.E) A) and C)
F) A) and D) B

Question 15

A tax on a market with elastic demand and elastic supply will shrink the market more than a tax on a market with inelastic demand and inelastic supply will shrink the market.

Accepted Answer

A) True 
 B)False

Question 16

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 17

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 18

Which of the following statements is correct?

Accepted Answer

A)  A tax levied on buyers will never be partially paid by sellers.
B)  Who bears the burden of a tax depends on the price elasticities of supply and demand.
C)  Government can decide who ultimately pays a tax.
D)  A tax levied on sellers always will be passed on completely to buyers.E) None of the above
F) B) and C) B

Question 19

Regardless of whether a tax is levied on sellers or buyers, taxes encourage market activity.

Accepted Answer

A) True 
 B)False

Question 20

Figure 6-9
 
-Refer to Figure 6-9. In this market, a minimum wage of $7 creates a labor

Accepted Answer

A)  shortage of 21,000 worker hours.
B)  shortage of 12,000 worker hours.
C)  surplus of 21,000 worker hours.
D)  surplus of 12,000 worker hours.E) B) and D)
F) A) and B)

Exam 6: Supply, Demand, and Government Policies

A tax on sellers shifts the supply curve but not the demand curve.

Correct AnswerverifiedShow Answer

A price floor is a legal minimum on the price at which a good or service can be sold.

Correct AnswerverifiedShow Answer

The goal of rent control is to

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is correct?

Correct AnswerverifiedShow Answer

A tax on golf clubs will cause buyers of golf clubs to pay a higher price, sellers of golf clubs to receive a lower price, and fewer golf clubs to be sold.

Correct AnswerverifiedTrue

Define a price ceiling.

Correct AnswerverifiedA price ceiling is a...View AnswerShow Answer

FICA is an example of a payroll tax, which is a tax on the wages that firms pay their workers.

Correct AnswerverifiedShow Answer

A tax on buyers decreases the quantity of the good sold in the market.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Lawmakers can decide whether the buyers or the sellers must send a tax to the government, but they cannot legislate the true burden of a tax.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

States in the U.S. may mandate minimum wages above the federal level.

Correct AnswerverifiedShow Answer

Figure 6-5 -Refer to Figure 6-5. Which of the following statements is not correct?

Correct AnswerverifiedB

A tax on a market with elastic demand and elastic supply will shrink the market more than a tax on a market with inelastic demand and inelastic supply will shrink the market.

Correct AnswerverifiedShow Answer

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

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

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedB

Regardless of whether a tax is levied on sellers or buyers, taxes encourage market activity.

Correct AnswerverifiedShow Answer

Figure 6-9 -Refer to Figure 6-9. In this market, a minimum wage of $7 creates a labor

Correct AnswerverifiedShow Answer

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True

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A price ceiling is a...
View Answer

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

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B

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B

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