Econ chpt. 6

Refer to Figure 6-19. Suppose a tax of $2 per unit is imposed on this market. How much will sellers receive per unit after the tax is imposed? a. $3 b. between $3 and $5 c. between $5 and $7 d. $7

a. $3 b. between $3 and $5 Correct c. between $5 and $7 d. $7

A nonbinding price ceiling (i) causes a surplus. (ii) causes a shortage. (iii) is set at a price above the equilibrium price. (iv) is set at a price below the equilibrium price. a. (i) only b. (iii) only c. (i) and (iii) only d. (ii) and (iv) only

a. (i) only b. (iii) only Correct c. (i) and (iii) only d. (ii) and (iv) only

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. alters both the quantity demanded and quantity supplied of labor. Correct 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.

Refer to Figure 6-14. 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.

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. Correct

A binding minimum wage tends to a. cause a labor surplus. b. cause unemployment. c. have the greatest impact in the market for teenage labor. d. All of the above are correct.

a. cause a labor surplus. b. cause unemployment. c. have the greatest impact in the market for teenage labor. d. All of the above are correct. Correct

Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling, the a. demand curve for physicals shifts to the right. b. supply curve for physicals shifts to the left. c. quantity demanded of physicals increases, and the quantity supplied of physicals decreases. d. number of physicals performed stays the same.

a. demand curve for physicals shifts to the right. b. supply curve for physicals shifts to the left. c. quantity demanded of physicals increases, and the quantity supplied of physicals decreases. Correct d. number of physicals performed stays the same.

A minimum wage that is set above a market's equilibrium wage will result in an excess a. demand for labor, that is, unemployment. b. demand for labor, that is, a shortage of workers. c. supply of labor, that is, unemployment. d. supply of labor, that is, a shortage of workers.

a. demand for labor, that is, unemployment. b. demand for labor, that is, a shortage of workers. c. supply of labor, that is, unemployment. Correct d. supply of labor, that is, a shortage of workers.

As a rationing mechanism, discrimination according to seller bias is a. efficient and fair. b. efficient, but potentially unfair. c. inefficient, but fair. d. inefficient and potentially unfair.

a. efficient and fair. b. efficient, but potentially unfair. Incorrect c. inefficient, but fair. Incorrect d. inefficient and potentially unfair.

A tax burden falls more heavily on the side of the market that a. has a fewer number of participants. b. is more inelastic. c. is closer to unit elastic. d. is less inelastic.

a. has a fewer number of participants. b. is more inelastic. Correct c. is closer to unit elastic. d. is less inelastic.

The tax burden will fall most heavily on sellers of the good when the demand curve a. is relatively steep, and the supply curve is relatively flat. b. is relatively flat, and the supply curve is relatively steep. c. and the supply curve are both relatively flat. d. and the supply curve are both relatively steep.

a. is relatively steep, and the supply curve is relatively flat. b. is relatively flat, and the supply curve is relatively steep. Correct c. and the supply curve are both relatively flat. d. and the supply curve are both relatively steep.

Refer to Figure 6-12. When the price ceiling applies in this market, and the supply curve for gasoline shifts from S1 to S2, the resulting quantity of gasoline that is bought and sold is a. less than Q3. b. Q3. c. between Q1 and Q3. d. at least Q1.

a. less than Q3. Correct b. Q3. c. between Q1 and Q3. d. at least Q1.

Refer to Figure 6-8. If the government imposes a price floor of $5 on this market, then there will be a. no surplus of the good. b. a surplus of 5 units of the good. c. a surplus of 10 units of the good. d. a surplus of 15 units of the good.

a. no surplus of the good. b. a surplus of 5 units of the good. c. a surplus of 10 units of the good. d. a surplus of 15 units of the good. Correct

The minimum wage, if it is binding, lowers the incomes of a. no workers. b. only those workers who become unemployed. c. only those workers who have jobs. d. all workers.

a. no workers. b. only those workers who become unemployed. Correct c. only those workers who have jobs. d. all workers.

A shortage results when a a. nonbinding price ceiling is imposed on a market. b. nonbinding price ceiling is removed from a market. c. binding price ceiling is imposed on a market. d. binding price ceiling is removed from a market.

a. nonbinding price ceiling is imposed on a market. b. nonbinding price ceiling is removed from a market. c. binding price ceiling is imposed on a market. Correct d. binding price ceiling is removed from a market.

Rent control policies tend to cause a. relatively smaller shortages in the short run than in the long run because supply and demand tends to be more elastic in the short run than in the long run. b. relatively larger shortages in the short run than in the long run because supply and demand tends to be more elastic in the short run than in the long run. c. relatively larger shortages in the short run than in the long run because supply and demand tends to be more inelastic in the short run than in the long run. d. relatively smaller shortages in the short run than in the long run because supply and demand tends to be more inelastic in the short run than in the long run.

a. relatively smaller shortages in the short run than in the long run because supply and demand tends to be more elastic in the short run than in the long run. b. relatively larger shortages in the short run than in the long run because supply and demand tends to be more elastic in the short run than in the long run. c. relatively larger shortages in the short run than in the long run because supply and demand tends to be more inelastic in the short run than in the long run. d. relatively smaller shortages in the short run than in the long run because supply and demand tends to be more inelastic in the short run than in the long run. Correct

Refer to Figure 6-2. The price ceiling causes quantity a. supplied to exceed quantity demanded by 45 units. b. supplied to exceed quantity demanded by 85 units. c. demanded to exceed quantity supplied by 45 units. d. demanded to exceed quantity supplied by 85 units.

a. supplied to exceed quantity demanded by 45 units. b. supplied to exceed quantity demanded by 85 units. c. demanded to exceed quantity supplied by 45 units. d. demanded to exceed quantity supplied by 85 units. Correct

Although lawmakers legislated a fifty-fifty division of the payment of the FICA tax, a. the actual tax incidence is unaffected by the legislated tax incidence. b. the employer now is required by law to pay more than 50 percent of the tax. c. the employee now is required by law to pay more than 50 percent of the tax. d. employers are no longer required by law to pay any portion of the tax.

a. the actual tax incidence is unaffected by the legislated tax incidence. Correct b. the employer now is required by law to pay more than 50 percent of the tax. c. the employee now is required by law to pay more than 50 percent of the tax. d. employers are no longer required by law to pay any portion of the tax.

A $1.50 tax levied on the buyers of pomegranate juice will shift the demand curve a. upward by exactly $1.50. b. upward by less than $1.50. c. downward by exactly $1.50. d. downward by less than $1.50.

a. upward by exactly $1.50. b. upward by less than $1.50. c. downward by exactly $1.50. Correct d. downward by less than $1.50.

Refer to Figure 6-31. Suppose that a price ceiling is imposed in this market at a price of $30 and market demand for the good subsequently increases. This would a. ​decrease the size of the surplus. b. ​decrease the size of the shortage. c. ​increase the size of the surplus. d. ​increase the size of the shortage.

a. ​decrease the size of the surplus. b. ​decrease the size of the shortage. c. ​increase the size of the surplus. d. ​increase the size of the shortage. Correct

​Suppose that a binding rent control law is repealed in San Francisco. As a result, we would expect the total number of units rented in the city to a. ​increase. b. ​decrease. c. ​remain unchanged. d. ​decrease, then increase.

a. ​increase. Correct b. ​decrease. c. ​remain unchanged. d. ​decrease, then increase.