chapter 6 of micro

Refer to Figure 6-9. The burden of the tax on buyers is a. $1 per unit. b. $1.50 per unit. c. $2 per unit. d. $3 per unit.

c. $2 per unit.

Refer to Figure 6-9. The burden of the tax on sellers is a. $1 per unit. b. $1.50 per unit. c. $2 per unit. d. $3 per unit.

a. $1 per unit

Refer to Figure 6-9. The effective price that sellers receive after the tax is imposed is a. $5. b. $6. c. $7. d. $8.

a. $5.

Refer to Table 6-3. Following the imposition of a price floor $2 above the equilibrium price, irate buyers convince Congress to repeal the price floor and to impose a price ceiling $1 below the former price floor. The resulting shortage is a. 0 units. b. 2 units. c. 5 units. d. 7 units

a. 0 units

Table 6-3 The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price floor $2 above the equilibrium price in this market. Price $0 $1 $2 $3 $4 $5 $6 QuantityDemanded 15 13 11 9 7 5 3 QuantitySupplied 0 3 6 9 12 15 18 Refer to Table 6-3. How many units of the good are sold after the imposition of the price floor? a. 5 b. 9 c. 10 d. 15

a. 5

Refer to Figure 6-9. As the figure is drawn, who sends the tax payment to the government? a. the buyers b. the sellers c. A portion of the tax payment is sent by the buyers and the remaining portion is sent by thesellers. d. The question of who sends the tax payment cannot be determined from the figure.

a. the buyers

If a tax is levied on the sellers of a product, then the supply curve a. will shift up. b. will shift down. c. will become flatter. d. will not shift.

a. will shift up.

Refer to Table 6-3. Following the imposition of a price floor $2 above the equilibrium price, irate buyers convince Congress to repeal the price floor and to impose a price ceiling $1 below the former price floor. The resulting market price is a. $2. b. $3. c. $4. d. $5.

b. $3

Rent-control laws dictate a. the exact rent that landlords must charge tenants. b. a maximum rent that landlords may charge tenants. c. a minimum rent that landlords may charge tenants. d. a minimum rent and a maximum rent that landlords may charge tenants.

b. a maximum rent that landlords may charge tenants.

Policymakers use taxes a. to raise revenue for public purposes, but not to influence market outcomes. b. both to raise revenue for public purposes and to influence market outcomes. c. when they realize that price controls alone are insufficient to correct market inequities. d. only in those markets in which the burden of the tax falls clearly on the sellers

b. both to raise revenue for public purposes and to influence market outcomes.

Price controls are usually enacted a. as a means of raising revenue for public purposes. b. when policymakers believe that the market price of a good or service is unfair to buyers or sellers. c. when policymakers detect inefficiencies in a market. d. All of the above are correct

b. when policymakers believe that the market price of a good or service is unfair to buyers or sellers.

Price controls a. always produce a fair outcome. b. always produce an efficient outcome. c. can generate inequities of their own. d. Both (a) and (b) are correct.

c. can generate inequities of their own.

In the final analysis, tax incidence 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.

c. depends on the forces of supply and demand.

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

c. movement up and to the left along the demand curve.

Refer to Figure 6-5. If the government imposes a price ceiling of $2 on this market, then the result is a a. shortage of 0 units of the good. b. shortage of 40 units of the good. c. shortage of 60 units of the good. d. shortage of 85 units of the good

c. shortage of 60 units of the good.

Refer to Figure 6-5. If the government imposes a price floor of $5 on this market, then the result is a a. surplus of 0 units of the good. b. surplus of 20 units of the good. c. surplus of 30 units of the good. d. surplus of 55 units of the good.

c. surplus of 30 units of the good.

Refer to Figure 6-9. The amount of the tax per unit is a. $1. b. $1.50. c. $2. d. $3.

d. $3.

Refer to Figure 6-9. The price that buyers pay after the tax is imposed is a. $5. b. $6. c. $7. d. $8

d. $8

Refer to Figure 6-5. The price of the good would continue to serve as the rationing mechanism if a. a price ceiling of $4 is imposed. b. a price ceiling of $5 is imposed. c. a price floor of $3 is imposed. d. All of the above are correct.

d. All of the above are correct.

Refer to Figure 6-5. 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 in question 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. either a price ceiling of $2.00 or a price floor of $5.00

A tax on the sellers of coffee will a. increase the price of coffee paid by buyers, increase the effective price of coffee received by sellers, and increase the equilibrium quantity of coffee. b. increase the price of coffee paid by buyers, increase the effective price of coffee received by sellers, and decrease the equilibrium quantity of coffee. c. increase the price of coffee paid by buyers, decrease the effective price of coffee received by sellers, and increase the equilibrium quantity of coffee. d. increase the price of coffee paid by buyers, decrease the effective price of coffee received by sellers, and decrease the equilibrium quantity of coffee.

d. increase the price of coffee paid by buyers, decrease the effective price of coffee received by sellers, and decrease the equilibrium quantity of coffee.

When a tax is placed on the buyers of lemonade, a. the sellers bear the entire burden of the tax. b. the buyers bear the entire burden of the tax. c. the burden of the tax will be always be equally divided between the buyers and the sellers. d. the burden of the tax will be shared by the buyers and the sellers, but the division of the burden is not always equal.

d. the burden of the tax will be shared by the buyers and the sellers, but the division of the burden is not always equal.