Question 1

To which of the following types of jobs does the minimum wage not apply?

Accepted Answer

A) jobs for teenagers 
B) jobs for members of minority groups 
C) internships 
D) All of the above are correct. 
A) jobs for teenagers 
B) jobs for members of minority groups 
C) internships 
D) All of the above are correct. C

Question 2

Buyers of a good bear the larger share of the tax burden when a tax is placed on a product for which

Accepted Answer

A) the supply is more elastic than the demand. 
B) the demand in more elastic than the supply. 
C) the tax is placed on the sellers of the product. 
D) the tax is placed on the buyers of the product. 
A) the supply is more elastic than the demand. 
B) the demand in more elastic than the supply. 
C) the tax is placed on the sellers of the product. 
D) the tax is placed on the buyers of the product. A

Question 3

Figure 6-10
  
-Refer to Figure 6-10.The amount of the tax per unit is

Accepted Answer

A) $1.00. 
B) $1.50. 
C) $2.50. 
D) $3.50. 
A) $1.00. 
B) $1.50. 
C) $2.50. 
D) $3.50. C

Question 4

Binding price ceilings benefit consumers because they allow consumers to buy all the goods they demand at a lower price.

Accepted Answer

A) True 
 B)False

Question 5

A binding minimum wage

Accepted Answer

A) alters both the quantity demanded and quantity supplied of labor. 
B) affects only the quantity of labor demanded; it does not affect the quantity of labor supplied. 
C) has no effect on the quantity of labor demanded or the quantity of labor supplied. 
D) causes only temporary unemployment, since the market will adjust and eliminate any temporary surplus of workers. 
A) alters both the quantity demanded and quantity supplied of labor. 
B) affects only the quantity of labor demanded; it does not affect the quantity of labor supplied. 
C) has no effect on the quantity of labor demanded or the quantity of labor supplied. 
D) causes only temporary unemployment, since the market will adjust and eliminate any temporary surplus of workers.

Question 6

Policymakers use taxes both to raise revenue for public purposes and to influence market outcomes.

Accepted Answer

A) True 
 B)False

Question 7

In the final analysis,tax incidence

Accepted Answer

A) depends on the legislated burden. 
B) is entirely random. 
C) depends on the forces of supply and demand. 
D) falls entirely on buyers or entirely on sellers. 
A) depends on the legislated burden. 
B) is entirely random. 
C) depends on the forces of supply and demand. 
D) falls entirely on buyers or entirely on sellers.

Question 8

A legal maximum price at which a good can be sold is a price

Accepted Answer

A) floor. 
B) stabilization. 
C) support. 
D) ceiling. 
A) floor. 
B) stabilization. 
C) support. 
D) ceiling.

Question 9

Under rent control,tenants can expect

Accepted Answer

A) lower rent and higher quality housing. 
B) lower rent and lower quality housing. 
C) higher rent and a shortage of rental housing. 
D) higher rent and a surplus of rental housing. 
A) lower rent and higher quality housing. 
B) lower rent and lower quality housing. 
C) higher rent and a shortage of rental housing. 
D) higher rent and a surplus of rental housing.

Question 10

The minimum wage was instituted in order to ensure workers

Accepted Answer

A) a middle-class standard of living. 
B) employment. 
C) a minimally adequate standard of living. 
D) unemployment compensation. 
A) a middle-class standard of living. 
B) employment. 
C) a minimally adequate standard of living. 
D) unemployment compensation.

Question 11

Figure 6-10
  
-Refer to Figure 6-10.The equilibrium price in the market before the tax is imposed is

Accepted Answer

A) $1.00. 
B) $3.50. 
C) $5.00. 
D) $6.00. 
A) $1.00. 
B) $3.50. 
C) $5.00. 
D) $6.00.

Question 12

Using a supply-demand diagram,show a labor market with a binding minimum wage.Now,use the diagram to show those who are helped by the minimum wage,and those who are hurt by the minimum wage.

Accepted Answer

a. For this example,a $300 price ceiling

Question 13

The initial impact of a tax on the sellers of a product is

Accepted Answer

A) on the supply of the product. 
B) on the demand for the product. 
C) on both the supply of the product and the demand for the product. 
D) more difficult to characterize than is the initial impact of a tax on the buyers of a product 
A) on the supply of the product. 
B) on the demand for the product. 
C) on both the supply of the product and the demand for the product. 
D) more difficult to characterize than is the initial impact of a tax on the buyers of a product

Question 14

Figure 6-9
  
-Refer to Figure 6-9.The amount of the tax per unit is

Accepted Answer

A) $10. 
B) $6. 
C) $4. 
D) $2. 
A) $10. 
B) $6. 
C) $4. 
D) $2.

Question 15

Figure 6-8
  
-Refer to Figure 6-8.The price that sellers receive after the tax is imposed is

Accepted Answer

A) $8. 
B) $6. 
C) $5. 
D) $3. 
A) $8. 
B) $6. 
C) $5. 
D) $3.

Question 16

Figure 6-11. On the graph below, the shift of the supply curve from S₁ to S₂ represents the imposition of a tax on a good. On the axes, Q represents the quantity of the good and P represents the price.
  
-Consider Figure 6-11.From the appearance of the graph,it is apparent that,for every unit of the good that is sold,

Accepted Answer

A) sellers are required to send one dollar to the government and buyers are required to send two dollars to the government. 
B) sellers are required to send two dollars to the government and buyers are required to send one dollar to the government. 
C) sellers are required to send three dollars to the government and buyers are required to send nothing to the government. 
D) sellers are required to send nothing to the government and buyers are required to send two dollars to the government. 
A) sellers are required to send one dollar to the government and buyers are required to send two dollars to the government. 
B) sellers are required to send two dollars to the government and buyers are required to send one dollar to the government. 
C) sellers are required to send three dollars to the government and buyers are required to send nothing to the government. 
D) sellers are required to send nothing to the government and buyers are required to send two dollars to the government.

Question 17

Under rent control,landlords cease to be responsive to tenants' concerns about the quality of the housing because

Accepted Answer

A) with shortages and waiting lists, they have no incentive to maintain and improve their property. 
B) they become resigned to the fact that many of their apartments are going to be vacant at any given time. 
C) with rent control the government guarantees landlords a minimal level of profit. 
D) with rent control it becomes the government's responsibility to maintain rental housing. 
A) with shortages and waiting lists, they have no incentive to maintain and improve their property. 
B) they become resigned to the fact that many of their apartments are going to be vacant at any given time. 
C) with rent control the government guarantees landlords a minimal level of profit. 
D) with rent control it becomes the government's responsibility to maintain rental housing.

Question 18

As of 2005,the U.S.minimum wage according to federal law was

Accepted Answer

A) $4.25 per hour. 
B) $4.85 per hour. 
C) $5.15 per hour. 
D) $5.45 per hour. 
A) $4.25 per hour. 
B) $4.85 per hour. 
C) $5.15 per hour. 
D) $5.45 per hour.

Question 19

Using the graph shown,answer the following questions.
a.What was the equilibrium price in this market before the tax?
b.What is the amount of the tax?
c.How much of the tax will the buyers pay?
d.How much of the tax will the sellers pay?
e. How much will the buyer pay for the product after the tax is imposed?
f. How much will the seller receive after the tax is imposed?
g. As a result of the tax, what has happened to the level of market activity?

Accepted Answer

a. $10.00
b. $5.00
c. $2.50
d.

Question 20

Congress intended that

Accepted Answer

A) the entire FICA tax be paid by workers. 
B) the entire FICA tax be paid by large firms. 
C) the entire FICA tax be paid by small firms. 
D) half the FICA tax be paid by workers, and half be paid by firms. 
A) the entire FICA tax be paid by workers. 
B) the entire FICA tax be paid by large firms. 
C) the entire FICA tax be paid by small firms. 
D) half the FICA tax be paid by workers, and half be paid by firms.

Exam 6: Supply, demand, and Government Policies

To which of the following types of jobs does the minimum wage not apply?

Buyers of a good bear the larger share of the tax burden when a tax is placed on a product for which

Figure 6-10 -Refer to Figure 6-10.The amount of the tax per unit is

Binding price ceilings benefit consumers because they allow consumers to buy all the goods they demand at a lower price.

A binding minimum wage

Policymakers use taxes both to raise revenue for public purposes and to influence market outcomes.

In the final analysis,tax incidence

A legal maximum price at which a good can be sold is a price

Under rent control,tenants can expect

The minimum wage was instituted in order to ensure workers

Figure 6-10 -Refer to Figure 6-10.The equilibrium price in the market before the tax is imposed is

Using a supply-demand diagram,show a labor market with a binding minimum wage.Now,use the diagram to show those who are helped by the minimum wage,and those who are hurt by the minimum wage.

The initial impact of a tax on the sellers of a product is

Figure 6-9 -Refer to Figure 6-9.The amount of the tax per unit is

Figure 6-8 -Refer to Figure 6-8.The price that sellers receive after the tax is imposed is

Under rent control,landlords cease to be responsive to tenants' concerns about the quality of the housing because

As of 2005,the U.S.minimum wage according to federal law was

Congress intended that

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Applications

Consumers, producers, and the Efficiency of Markets

Application: the Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, investment, and the Financial System

The Basic Tools of Finance

Unemployment

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade Off Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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