Question 1

A price ceiling is a legal minimum on the price of a good or service.

Accepted Answer

A) True 
 B)False  False

Question 2

Market demand is given as QD = 150 - 3P.Market supply is given as QS = 2P + 50.Which legally imposed price would constitute a binding price floor

Accepted Answer

A) $10 
B) $15 
C) $20 
D) $25 
A) $10 
B) $15 
C) $20 
D) $25 D

Question 3

In the housing market,what effect do rent controls have on quantity supplied and quantity demanded

Accepted Answer

A) causes both to fall 
B) causes quantity supplied to fall and quantity demanded to rise 
C) causes quantity supplied to rise and quantity demanded to fall 
D) causes both to rise 
A) causes both to fall 
B) causes quantity supplied to fall and quantity demanded to rise 
C) causes quantity supplied to rise and quantity demanded to fall 
D) causes both to rise B

Question 4

Upon whom does a minimum wage have its greatest impact

Accepted Answer

A) older workers 
B) male workers 
C) female workers 
D) teenage workers 
A) older workers 
B) male workers 
C) female workers 
D) teenage workers

Question 5

Which statement best describes a price floor

Accepted Answer

A) A price floor is a legal minimum on the price at which a good can be sold. 
B) A price floor is a legal maximum on the price at which a good can be sold. 
C) A price floor is temporarily set below the market equilibrium. 
D) A price floor is temporarily set at the market equilibrium. 
A) A price floor is a legal minimum on the price at which a good can be sold. 
B) A price floor is a legal maximum on the price at which a good can be sold. 
C) A price floor is temporarily set below the market equilibrium. 
D) A price floor is temporarily set at the market equilibrium.

Question 6

Rent control may lead to lower rents for those who find housing,but the quality of the housing may also be lower.

Accepted Answer

A) True 
 B)False

Question 7

When will buyers of a product pay the majority of a tax placed on a product

Accepted Answer

A) when supply is more elastic than demand 
B) when demand is more elastic than supply 
C) when the tax is placed on the seller of the product 
D) when the tax is placed on the buyer of the product 
A) when supply is more elastic than demand 
B) when demand is more elastic than supply 
C) when the tax is placed on the seller of the product 
D) when the tax is placed on the buyer of the product

Question 8

What do economists generally regard rent control to be

Accepted Answer

A) an efficient and equitable way to help low-income households 
B) not efficient, but the best way to solve a serious social problem 
C) a highly inefficient way to help low-income households raise their standard of living 
D) an efficient way to allocate housing, but not a good way to help low-income households 
A) an efficient and equitable way to help low-income households 
B) not efficient, but the best way to solve a serious social problem 
C) a highly inefficient way to help low-income households raise their standard of living 
D) an efficient way to allocate housing, but not a good way to help low-income households

Question 9

What will happen if a newly imposed minimum wage is set above the equilibrium wage in a labour market

Accepted Answer

A) The equilibrium wage in the market will rise. 
B) Every worker who is earning a wage below the minimum will be better off. 
C) Some workers will get a raise and some workers will lose their jobs. 
D) Workers earning more than the minimum wage will be worse off. 
A) The equilibrium wage in the market will rise. 
B) Every worker who is earning a wage below the minimum will be better off. 
C) Some workers will get a raise and some workers will lose their jobs. 
D) Workers earning more than the minimum wage will be worse off.

Question 10

Market demand is given as QD = 100 - P.Market supply is given as QS = 4P.Which legally imposed price would constitute a binding price ceiling

Accepted Answer

A) $16 
B) $26 
C) $66 
D) $96 
A) $16 
B) $26 
C) $66 
D) $96

Question 11

When binding price ceilings are imposed in a market,what happens

Accepted Answer

A) Price no longer serves as a rationing device. 
B) The market will be cleared of any shortages or surpluses that existed previously. 
C) Buyers and sellers both benefit equally. 
D) The market concludes that the government is attempting to improve market efficiency. 
A) Price no longer serves as a rationing device. 
B) The market will be cleared of any shortages or surpluses that existed previously. 
C) Buyers and sellers both benefit equally. 
D) The market concludes that the government is attempting to improve market efficiency.

Question 12

Market demand is given as QD = 75 - 2P.Market supply is given as QS = 3P.Which legally imposed price would constitute a binding price floor

Accepted Answer

A) $0 
B) $5 
C) $15 
D) $40 
A) $0 
B) $5 
C) $15 
D) $40

Question 13

When free markets ration goods with prices,it is both efficient and impersonal.

Accepted Answer

A) True 
 B)False

Question 14

Market demand is given as QD = 280 - 4P.Market supply is given as QS = 2P + 40.Which legally imposed price would constitute a binding price ceiling

Accepted Answer

A) $30 
B) $40 
C) $50 
D) $60 
A) $30 
B) $40 
C) $50 
D) $60

Question 15

Figure 6-11
  
-Refer to Figure 6-11.In which market will the majority of a tax be paid by the seller

Accepted Answer

A) market (a) 
B) market (b) 
C) market (c) 
D) market (d) 
A) market (a) 
B) market (b) 
C) market (c) 
D) market (d)

Question 16

Who pays the majority of a tax levied on a product depends on whether the tax is placed on the buyer or the seller.

Accepted Answer

A) True 
 B)False

Question 17

Why are policymakers led to control prices

Accepted Answer

A) They view the market's outcome as inefficient. 
B) They view the market's outcome as unfair. 
C) All politicians enjoy exercising their power. 
D) They are required to do so under the Employment Act of 1946. 
A) They view the market's outcome as inefficient. 
B) They view the market's outcome as unfair. 
C) All politicians enjoy exercising their power. 
D) They are required to do so under the Employment Act of 1946.

Question 18

What do advocates of the minimum wage believe,in general

Accepted Answer

A) There are no adverse effects of minimum-wage laws. 
B) Adverse effects are small, and generally a higher minimum wage makes the poor better off. 
C) The minimum wage is the answer to society's economic problems. 
D) The market system should be replaced by central economic planning, in accordance with socialist principles. 
A) There are no adverse effects of minimum-wage laws. 
B) Adverse effects are small, and generally a higher minimum wage makes the poor better off. 
C) The minimum wage is the answer to society's economic problems. 
D) The market system should be replaced by central economic planning, in accordance with socialist principles.

Question 19

Figure 6-8
  
-Refer to Figure 6-8.What is the price buyers will pay after the tax is imposed

Accepted Answer

A) $5.00 
B) $6.00 
C) $7.00 
D) $8.00 
A) $5.00 
B) $6.00 
C) $7.00 
D) $8.00

Question 20

Figure 6-4
  
-Refer to Figure 6-4.With a price ceiling present in this market,what will happen when the supply curve for gasoline shifts from S₁ to S₂

Accepted Answer

A) The price will increase to P₃. 
B) A surplus will occur at the new market price of P₂. 
C) The market price will stay at P₁ due to the price ceiling. 
D) A shortage will occur at the price ceiling of P₂. 
A) The price will increase to P₃. 
B) A surplus will occur at the new market price of P₂. 
C) The market price will stay at P₁ due to the price ceiling. 
D) A shortage will occur at the price ceiling of P₂.

Exam 6: Supply, demand, and Government Policies

A price ceiling is a legal minimum on the price of a good or service.

Market demand is given as QD = 150 - 3P.Market supply is given as QS = 2P + 50.Which legally imposed price would constitute a binding price floor

In the housing market,what effect do rent controls have on quantity supplied and quantity demanded

Upon whom does a minimum wage have its greatest impact

Which statement best describes a price floor

Rent control may lead to lower rents for those who find housing,but the quality of the housing may also be lower.

When will buyers of a product pay the majority of a tax placed on a product

What do economists generally regard rent control to be

What will happen if a newly imposed minimum wage is set above the equilibrium wage in a labour market

Market demand is given as QD = 100 - P.Market supply is given as QS = 4P.Which legally imposed price would constitute a binding price ceiling

When binding price ceilings are imposed in a market,what happens

Market demand is given as QD = 75 - 2P.Market supply is given as QS = 3P.Which legally imposed price would constitute a binding price floor

When free markets ration goods with prices,it is both efficient and impersonal.

Market demand is given as QD = 280 - 4P.Market supply is given as QS = 2P + 40.Which legally imposed price would constitute a binding price ceiling

Figure 6-11 -Refer to Figure 6-11.In which market will the majority of a tax be paid by the seller

Who pays the majority of a tax levied on a product depends on whether the tax is placed on the buyer or the seller.

Why are policymakers led to control prices

What do advocates of the minimum wage believe,in general

Figure 6-8 -Refer to Figure 6-8.What is the price buyers will pay after the tax is imposed

Figure 6-4 -Refer to Figure 6-4.With a price ceiling present in this market,what will happen when the supply curve for gasoline shifts from S₁ to S₂

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

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

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

Filters

Market demand is given as Q_D= 150 - 3P.Market supply is given as Q_S= 2P + 50.Which legally imposed price would constitute a binding price floor

Market demand is given as Q_D= 100 - P.Market supply is given as Q_S= 4P.Which legally imposed price would constitute a binding price ceiling

Market demand is given as Q_D= 75 - 2P.Market supply is given as Q_S= 3P.Which legally imposed price would constitute a binding price floor

Market demand is given as Q_D= 280 - 4P.Market supply is given as Q_S= 2P + 40.Which legally imposed price would constitute a binding price ceiling