Question 1

When a binding price ceiling is imposed on a market to benefit buyers,

Accepted Answer

A)   no buyers actually benefit.
B)   some buyers benefit, but no buyers are harmed.
C)   some buyers benefit, and some buyers are harmed.
D)   all buyers benefit.E) A) and D)
F) A) and C)

Question 2

The term tax incidence refers to

Accepted Answer

A)   whether buyers or sellers of a good are required to send tax payments to the government.
B)   whether the demand curve or the supply curve shifts when the tax is imposed.
C)   the distribution of the tax burden between buyers and sellers.
D)   widespread view that taxes (and death)  are the only certainties in life.E) B) and C)
F) All of the above

Question 3

If the government passes a law requiring buyers of college textbooks to send $5 to the government for every textbook they buy,then

Accepted Answer

A)   the demand curve for textbooks shifts downward by $5.
B)   buyers of textbooks pay $5 more per textbook than they were paying before the tax.
C)   sellers of textbooks are unaffected by the tax.
D)   All of the above are correct.E) None of the above
F) B) and D)

Question 4

A tax on sellers reduces the size of a market.

Accepted Answer

A) True 
 B)False

Question 5

To say that a price ceiling is binding is to say that the price ceiling

Accepted Answer

A)   results in a surplus.
B)   is set above the equilibrium price.
C)   causes quantity demanded to exceed quantity supplied.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 6

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 7

Figure 6-4
 
-Refer to Figure 6-4.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) C) and D)
F) A) and B)

Question 8

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) All of the above
F) C) and D)

Question 9

If a binding price floor is imposed on the video game market,then

Accepted Answer

A)   the quantity of video games demanded will decrease.
B)   the quantity of video games supplied will increase.
C)   a surplus of video games will develop.
D)   All of the above are correct.E) A) and C)
F) B) and C)

Question 10

When a binding price ceiling is imposed on a market,

Accepted Answer

A)   price no longer serves as a rationing device.
B)   the quantity supplied at the price ceiling exceeds the quantity that would have been supplied without the price ceiling.
C)   all buyers benefit.
D)   All of the above are correct.E) All of the above
F) None of the above

Question 11

Figure 6-27
 
-Refer to Figure 6-27.If the government places a $2 tax in the market,the seller bears $1 of the tax burden.

Accepted Answer

A) True 
 B)False

Question 12

The price paid by buyers 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)   imposes a binding price ceiling in that market.E) None of the above
F) A) and C)

Question 13

Suppose there is currently a tax of $50 per ticket on airline tickets.Sellers of airline tickets are required to pay the tax to the government.If the tax is reduced from $50 per ticket to $30 per ticket,then the

Accepted Answer

A)   demand curve will shift upward by $20, and the price paid by buyers will decrease by less than $20.
B)   demand curve will shift upward by $20, and the price paid by buyers will decrease by $20.
C)   supply curve will shift downward by $20, and the effective price received by sellers will increase by less than $20.
D)   supply curve will shift downward by $20, and the effective price received by sellers will increase by $20.E) B) and C)
F) A) and B)

Question 14

Suppose buyers of vodka are required to send $1.00 to the government for every bottle of vodka they buy.Further,suppose this tax causes the effective price received by sellers of vodka to fall by $0.60 per bottle.Which of the following statements is correct?

Accepted Answer

A)   This tax causes the supply curve for vodka to shift upward by $1.00 at each quantity of vodka.
B)   The price paid by buyers is $0.40 per bottle more than it was before the tax.
C)   Sixty percent of the burden of the tax falls on buyers.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 15

A tax on the buyers of personal computer external hard drives encourages

Accepted Answer

A)   sellers to supply a smaller quantity at every price.
B)   buyers to demand a smaller quantity at every price.
C)   buyers to demand a larger quantity at every price.
D)   Both a)  and b)  are correct.E) C) and D)
F) A) and D)

Question 16

Figure 6-4
 
-Refer to Figure 6-4.A government-imposed price of $6 in this market could be an example of a
(i) binding price ceiling.
(ii) non-binding price ceiling.
(iii) binding price floor.
(iv) non-binding price floor.

Accepted Answer

A)   (i)  only
B)   (ii)  only
C)   (i)  and (iv)  only
D)   (ii)  and (iii)  onlyE) B) and C)
F) A) and B)

Question 17

Figure 6-26
 
-Refer to Figure 6-26.A price ceiling set at $30 would create a shortage of 20 units.

Accepted Answer

A) True 
 B)False

Question 18

The Earned Income Tax Credit is an example of a

Accepted Answer

A)   minimum-wage law.
B)   price ceiling.
C)   wage subsidy.
D)   rent subsidy.E) A) and B)
F) A) and C)

Question 19

When a tax is levied on sellers of tea,

Accepted Answer

A)   the well-being of both sellers and buyers of tea is unaffected.
B)   sellers of tea are made worse off, and the well-being of buyers is unaffected.
C)   sellers of tea are made worse off, and buyers of tea are made better off.
D)   both sellers and buyers of tea are made worse off.E) A) and D)
F) A) and C)

Question 20

If a tax is levied on the sellers of a product,then there will be a(n)

Accepted Answer

A)   downward shift of the demand curve.
B)   upward shift of the demand curve.
C)   movement up and to the left along the demand curve.
D)   movement down and to the right along the demand curve.E) B) and C)
F) A) and B)

Exam 6: Supply, Demand, And Government Policies.

To say that a price ceiling is binding is to say that the price ceiling

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If the government passes a law requiring buyers of college textbooks to send $5 to the government for every textbook they buy,then

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When a binding price ceiling is imposed on a market,

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Suppose buyers of vodka are required to send $1.00 to the government for every bottle of vodka they buy.Further,suppose this tax causes the effective price received by sellers of vodka to fall by $0.60 per bottle.Which of the following statements is correct?

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Suppose there is currently a tax of $50 per ticket on airline tickets.Sellers of airline tickets are required to pay the tax to the government.If the tax is reduced from $50 per ticket to $30 per ticket,then the

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Figure 6-4 -Refer to Figure 6-4.A government-imposed price of $6 in this market could be an example of a (i) binding price ceiling. (ii) non-binding price ceiling. (iii) binding price floor. (iv) non-binding price floor.

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If a tax is levied on the sellers of a product,then there will be a(n)

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The price paid by buyers in a market will increase if the government

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A tax on sellers reduces the size of a market.

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A tax on the buyers of personal computer external hard drives encourages

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The Earned Income Tax Credit is an example of a

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Figure 6-26 -Refer to Figure 6-26.A price ceiling set at $30 would create a shortage of 20 units.

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The tax incidence

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Figure 6-27 -Refer to Figure 6-27.If the government places a $2 tax in the market,the seller bears $1 of the tax burden.

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

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If a binding price floor is imposed on the video game market,then

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When a binding price ceiling is imposed on a market to benefit buyers,

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When a tax is levied on sellers of tea,

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The term tax incidence refers to

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Figure 6-4 -Refer to Figure 6-4.Which of the following statements is not correct?

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