ECON CH6
The amount of the tax per unit is A.$6. B.$8. C.$14. D.$18.
C
2.7 Suppose a price ceiling of $5 is imposed on this market. As a result, A. the quantity of the good supplied decreases by 20 units. B.the demand curve shifts to the left; quantity sold is now 30 units and the price is $5. C.buyers' total expenditure on the good decreases by $80. D.the price of the good continues to serve as the rationing mechanism.
A
For a price ceiling to be binding in this market, it would have to be set at A. any price below $7. B. any price above $3. C. any price below $9. D. any price above $7.
A
Rent control A.serves as an example of how a social problem can be alleviated or even solved by government policies. B. serves as an example of a price ceiling. C. is regarded by most economists as an efficient way of helping the poor. D. is the most efficient way to allocate scarce housing resources.
B
2.24 The per-unit burden of the tax on buyers of the good is A. $2. B.$4. C.$6. D. $8.
C
The per-unit burden of the tax on buyers of the good is A.$2. B.$4. C.$6. D. $8.
C
At which price would a price ceiling be nonbinding? A.$4 B.$5 C.$3 D.$7
D
Which of the following price controls would cause a surplus of 20 units of the good? A.a price ceiling set at $6 B.a price ceiling set at $5 C.a price floor set at $9 D.a price floor set at $8
D
2.9 If the government levies a $5 tax per ticket on buyers of NFL game tickets, then the price paid by buyers of NFL game tickets would A.increase by less than $5. B.increase by exactly $5. C. increase by more than $5. D.decrease by an indeterminate amount.
A
A binding minimum wage 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 because the market will adjust and eliminate any temporary surplus of workers.
A
A price ceiling set at A. $6 will be binding and will result in a shortage of 10 units. B. $6 will be binding and will result in a shortage of 6 units. C. $16 will be binding and will result in a shortage of 10 units. D. $16 will be binding and will result in a shortage of 4 units.
A
If the government removes a tax on a good, then the quantity of the good sold will A. increase. B. decrease. C. not change. D. All of the above are possible.
A
What is the amount of the tax per unit? A.$8 B.$6 C.$4 D.$2
A
Which of the following price controls would cause a shortage of 20 units of the good? A. a price ceiling set at $6 B.a price ceiling set at $5 C.a price floor set at $9 D.a price floor set at $8
A
2.15 The price of the good would continue to serve as the rationing mechanism if A. a price ceiling of $3 is imposed. B. a price ceiling of $5 is imposed. C. a price floor of $5 is imposed. D.All of the above are correct.
B
2.18 Suppose a tax of $6 per unit is imposed on this market. What will be the new equilibrium quantity in this market? A.less than 20 units B.20 units C.between 20 units and 35 units D.greater than 35 units
B
A legal minimum on the price at which a good can be sold is called a A.price subsidy. B.price floor. C.tax. D.price ceiling.
B
Assume the demand for cigarettes is relatively inelastic, and the supply of cigarettes is relatively elastic. When cigarettes are taxed, we would expect A. most of the burden of the tax to fall on sellers of cigarettes, regardless of whether buyers or sellers of cigarettes are required to pay the tax to the government. B.most of the burden of the tax to fall on buyers of cigarettes, regardless of whether buyers or sellers of cigarettes are required to pay the tax to the government. C.the distribution of the tax burden between buyers and sellers of cigarettes to depend on whether buyers or sellers of cigarettes are required to pay the tax to the government. D. a large percentage of smokers to quit smoking in response to the tax.
B
If a tax is levied on the buyers of a product, then there will be a(n) A. upward shift of the demand curve. B. downward 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.
B
The vertical distance between points A and B represents the tax in the market. Refer to Figure 6-18. The effective price that sellers receive after the tax is imposed is A.$6. B.$10. C.$16. D.$24.
B
Which of the following causes a shortage of a good? A. a binding price floor B. a binding price ceiling C. a tax on the good D. None of the above is correct.
B
A price floor set at A.$6 will be binding and will result in a surplus of 10 units. B.$6 will be binding and will result in a surplus of 6 units. C.$16 will be binding and will result in a surplus of 10 units. D.$16 will be binding and will result in a surplus of 4 units.
C
If the government imposes a price floor at $10, it would be A. binding if market demand is Demand A or Demand B. B. non-binding if market demand is Demand A or Demand B. C. binding if market demand is Demand A and non-binding if market demand is Demand B. D. non-binding if market demand is Demand A and binding if market demand is Demand B.
C
If the government imposes a price floor of $10 on this market, then there will be A.no surplus. B. a surplus of 20 units. C. a surplus of 30 units. D. a surplus of 10 units.
C
Suppose a price floor of $8 is imposed on this market. As a result, A.buyers' total expenditure on the good decreases by $20. B.the supply curve shifts to the left; quantity sold is now 30 units and the price is $8. C.the quantity of the good demanded decreases by 10 units. D.the price of the good continues to serve as the rationing mechanism.
C
The term tax incidence refers to 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.
C
Which of the following is correct? Price controls A.always help those they are designed to help. B. never help those they are designed to help. C. often hurt those they are designed to help. D.always hurt those they are designed to help.
C
2.20 When a certain price control is imposed on this market, the resulting quantity of the good that is actually bought and sold is such that buyers are willing and able to pay a maximum of P1 dollars per unit for that quantity and sellers are willing and able to accept a minimum of P2 dollars per unit for that quantity. If P1 - P2 = $3, then the price control is A. a price ceiling of $2.00. B.a price ceiling of $5.00. C. a price floor of $5.00. D. either a price ceiling of $2.00 or a price floor of $5.00.
D
2.21 For a price floor to be binding in this market, it would have to be set at A.any price below $7. B. any price below $3. C. any price below $9. D. any price above $7.
D
2.23 If the horizontal line on the graph represents a price floor, then the price floor is A. binding and creates a shortage of 20 units of the good. B. binding and creates a shortage of 40 units of the good. C. not binding but creates a shortage of 40 units of the good. D. not binding, and there will be no surplus or shortage of the good.
D
If the government imposes a price ceiling of $2 on this market, then there will be A. no shortage of the good. B. a shortage of 10 units of the good. C. a shortage of 20 units of the good. D. a shortage of 30 units of the good.
D
If the horizontal line on the graph represents a price floor, then the price floor is A. binding and creates a shortage of 20 units of the good. B. binding and creates a shortage of 40 units of the good. C. not binding but creates a shortage of 40 units of the good. D. not binding, and there will be no surplus or shortage of the good.
D
Rent control A.is an example of a price ceiling. B. leads to a larger shortage of apartments in the long run than in the short run. C.leads to lower rents and, in the long run, to lower-quality housing. D.All of the above are correct.
D