Question 1

In 2012, the U.S. minimum wage according to federal law was

Accepted Answer

A)  $4.25 per hour.
B)  $5.15 per hour.
C)  $5.75 per hour.
D)  $7.25 per hour.E) C) and D)
F) A) and C)

Question 2

A binding minimum wage creates a shortage of labor.

Accepted Answer

A) True 
 B)False

Question 3

Figure 6-15 
-Refer to Figure 6-15. For a price ceiling to be binding in this market, it would have to be set at

Accepted Answer

A)  any price below $3.
B)  a price between $2 and $3.
C)  a price between $3 and $4.
D)  any price above $3.E) A) and C)
F) A) and B)

Question 4

When government imposes a price ceiling or a price floor on a market,

Accepted Answer

A)  price no longer serves as a rationing device.
B)  efficiency in the market is enhanced.
C)  shortages and surpluses are eliminated.
D)  both buyers and sellers become better off.E) None of the above
F) A) and B)

Question 5

The tax incidence

Accepted Answer

A)  is the manner in which the burden of a tax is shared among participants in a market.
B)  can be shifted to the buyer by imposing the tax on the buyers of a product in a market.
C)  can be shifted to the seller by imposing the tax on the sellers of a product in a market.
D)  All of the above are correct.E) B) and C)
F) A) and C)

Question 6

The economy contains many labor markets for different types of workers.

Accepted Answer

A) True 
 B)False

Question 7

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. 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 B)
F) None of the above

Question 8

Figure 6-4 
-Refer to Figure 6-4. A government-imposed price ceiling of $6 in this market results in

Accepted Answer

A)  a shortage of 8 units.
B)  a shortage of 4 units.
C)  14 units sold.
D)  10 units sold.E) A) and B)
F) A) and C)

Question 9

If the minimum wage exceeds the equilibrium wage, then

Accepted Answer

A)  the quantity demanded of labor will exceed the quantity supplied.
B)  the quantity supplied of labor will exceed the quantity demanded.
C)  the minimum wage will not be binding.
D)  there will be no unemployment.E) B) and C)
F) A) and B)

Question 10

If a binding price ceiling is imposed on the baby formula market, then

Accepted Answer

A)  the quantity of baby formula demanded will increase.
B)  the quantity of baby formula supplied will decrease.
C)  a shortage of baby formula will develop.
D)  All of the above are correct.E) C) and D)
F) B) and C)

Question 11

Table 6-6 
-Refer to Table 6-6. If the government set a price floor at $4, would there be a shortage or surplus, and how large would be the shortage/surplus?

Accepted Answer

A price floor set at...

Question 12

When a binding price floor is imposed on a market,

Accepted Answer

A)  price no longer serves as a rationing device.
B)  the quantity demanded at the price floor exceeds the quantity that would have been demanded without the price floor.
C)  all sellers benefit.
D)  All of the above are correct.E) A) and B)
F) All of the above

Question 13

Figure 6-3
Panel (a) 
Panel (b)   
-Refer to Figure 6-3. In panel (b) , 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.E) C) and D)
F) B) and D)

Question 14

When a free market for a good reaches equilibrium, anyone who is willing and able to pay the market price can buy the good.

Accepted Answer

A) True 
 B)False

Question 15

​Whether the minimum wage is a binding price floor always depends upon whether the economy is in a recession.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following observations would be consistent with the imposition of a binding price ceiling on a market? After the price ceiling becomes effective,

Accepted Answer

A)  a smaller quantity of the good is bought and sold.
B)  a smaller quantity of the good is demanded.
C)  a larger quantity of the good is supplied.
D)  the price rises above the previous equilibrium.E) B) and D)
F) None of the above

Question 17

Consider the market for gasoline. Buyers

Accepted Answer

A)  and sellers would lobby for a price ceiling.
B)  and sellers would lobby for a price floor.
C)  would lobby for a price ceiling, whereas sellers would lobby for a price floor.
D)  would lobby for a price floor, whereas sellers would lobby for a price ceiling.E) A) and B)
F) None of the above

Question 18

Suppose buyers of fountain drinks are required to send $0.50 to the government for every fountain drink they buy. Further, suppose this tax causes the effective price received by sellers of fountain drinks to fall by $0.20 per drink. Which of the following statements is correct?

Accepted Answer

A)  This tax causes the demand curve for fountain drinks to shift downward by $0.50 at each quantity.
B)  The price paid by buyers is $0.30 per drink more than it was before the tax.
C)  Forty percent of the burden of the tax falls on sellers.
D)  All of the above are correct.E) B) and C)
F) B) and D)

Question 19

Figure 6-23 
-Refer to Figure 6-23. The price paid by buyers after the tax is imposed is

Accepted Answer

A)  $3.
B)  $4.
C)  $5.
D)  $6.E) B) and D)
F) C) and D)

Question 20

Figure 6-35 
-Refer to Figure 6-35. A price ceiling set at $30 would create a shortage of 20 units.

Accepted Answer

A) True 
 B)False

Exam 6: Supply, Demand, and Government Policies

Figure 6-15 -Refer to Figure 6-15. For a price ceiling to be binding in this market, it would have to be set at

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The tax incidence

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Table 6-6 -Refer to Table 6-6. If the government set a price floor at $4, would there be a shortage or surplus, and how large would be the shortage/surplus?

Correct AnswerverifiedA price floor set at...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. Which of the following is correct?

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Suppose buyers of fountain drinks are required to send $0.50 to the government for every fountain drink they buy. Further, suppose this tax causes the effective price received by sellers of fountain drinks to fall by $0.20 per drink. Which of the following statements is correct?

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When government imposes a price ceiling or a price floor on a market,

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Which of the following observations would be consistent with the imposition of a binding price ceiling on a market? After the price ceiling becomes effective,

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​Whether the minimum wage is a binding price floor always depends upon whether the economy is in a recession.

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Figure 6-4 -Refer to Figure 6-4. A government-imposed price ceiling of $6 in this market results in

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When a binding price floor is imposed on a market,

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Consider the market for gasoline. Buyers

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

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Figure 6-35 -Refer to Figure 6-35. A price ceiling set at $30 would create a shortage of 20 units.

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A binding minimum wage creates a shortage of labor.

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Figure 6-23 -Refer to Figure 6-23. The price paid by buyers after the tax is imposed is

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If a binding price ceiling is imposed on the baby formula market, then

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If the minimum wage exceeds the equilibrium wage, then

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The economy contains many labor markets for different types of workers.

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In 2012, the U.S. minimum wage according to federal law was

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When a free market for a good reaches equilibrium, anyone who is willing and able to pay the market price can buy the good.

Correct AnswerverifiedShow Answer

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A price floor set at...
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Whether the minimum wage is a binding price floor always depends upon whether the economy is in a recession.

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