Microeconomics Chapter Six

question

True

answer

T/F: Policymakers use taxes to raise revenue for public purposes and to influence market outcomes.

question

False

answer

T/F: A price ceiling set above the equilibrium price causes quantity demanded to exceed quantity supplied.

question

False

answer

T/F: If a price ceiling of $2 per gallon is imposed on gasoline, and the market equilibrium price is $1.50, then the price ceiling is a binding constraint on the market.

question

True

answer

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

question

True

answer

T/F: A tax on golf clubs will cause buyers of golf clubs to pay a higher price, sellers of golf clubs to receive a lower price, and fewer golf clubs to be sold.

question

True

answer

T/F: A tax of $1 on sellers shifts the supply curve upward by exactly $1.

question

True

answer

T/F: The wedge between the buyers' price and the sellers' price is the same, regardless of whether the tax is levied on buyers or sellers.

question

True

answer

T/F: Whether a tax is levied on sellers or buyers, buyers and sellers usually share the burden of taxes.

question

False

answer

T/F: The tax incidence depends on whether the tax is levied on buyers or sellers.

question

True

answer

T/F: Who bears the majority of a tax burden depends on the relative elasticity of supply and demand.

question

c. policymakers believed that the price that prevailed in that market in the absence of price controls was unfair to buyers or sellers.

answer

The presence of a price control in a market for a good or service usually is an indication that
a. an insufficient quantity of the good or service was being produced in that market to meet the public's need.
b. the usual forces of supply and demand were not able to establish an equilibrium price in that market.
c. policymakers believed that the price that prevailed in that market in the absence of price controls was unfair to buyers or sellers.
d. policymakers correctly believed that price controls would generate no inequities of their own once imposed.

question

d. All of the above are correct.

answer

If a binding price ceiling is imposed on the baby formula market, then
a. the quantity of baby formula demanded will increase.
b. the quantity of baby formula supplied will decrease.
c. a shortage of baby formula will develop.
d. All of the above are correct.

question

c. some sellers benefit, and some sellers are harmed.

answer

When a binding price floor is imposed on a market to benefit sellers,
a. no sellers actually benefit.
b. some sellers benefit, but no sellers are harmed.
c. some sellers benefit, and some sellers are harmed.
d. all sellers benefit.

question

c. decrease, and the price received by sellers will increase.

answer

If the government removes a tax on a good, then the price paid by buyers will
a. increase, and the price received by sellers will increase.
b. increase, and the price received by sellers will decrease.
c. decrease, and the price received by sellers will increase.
d. decrease, and the price received by sellers will decrease.

question

c. supply curve upward by the amount of the tax.

answer

A tax on sellers will shift the
a. demand curve upward by the amount of the tax.
b. demand curve downward by the amount of the tax.
c. supply curve upward by the amount of the tax.
d. supply curve downward by the amount of the tax.

question

a. increase by less than $5.

answer

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.

question

d. $4

answer

Refer to Figure 6-21. What is the amount of the tax per unit?

a. $1

b. $2

c. $3

d. $4

question

d. $12.00.

answer

Refer to Figure 6-21. The price that buyers pay after the tax is imposed is

a. $8.00.

b. $9.00.

c. $10.50.

d. $12.00.

question

a. $8.00

answer

Refer to Figure 6-21. Acme, Inc. is a seller of the good. Acme sells a unit of the good to a buyer and then pays the tax on that unit to the government. Acme is left with how much money?

a. $8.00

b. $9.00

c. $10.50

d. $12.00

question

c. $420

answer

Refer to Figure 6-21. In the after-tax equilibrium, how much revenue does the government collect from the tax on this good?

a. $210

b. $345

c. $420

d. $480

question

a. $3.50.

answer

Refer to Figure 6-22. The equilibrium price in the market before the tax is imposed is

a. $3.50.

b. $5.00.

c. $2.00.

d. $1.50.

question

b. The sellers send the tax payment.

answer

Refer to Figure 6-22. As the figure is drawn, who sends the tax payment to the government?

a. The buyers send the tax payment.

b. The sellers send the tax payment.

c. A portion of the tax payment is sent by the buyers, and the remaining portion is sent by the sellers.

d. The question of who sends the tax payment cannot be determined from the graph.

question

c. $5.00.

answer

Refer to Figure 6-22. The price paid by buyers after the tax is imposed is

a. $3.00.

b. $3.50.

c. $5.00.

d. $6.00.

question

d. $3.00.

answer

Refer to Figure 6-22. The effective price sellers receive after the tax is imposed is

a. $2.00.

b. $3.50.

c. $5.00.

d. $3.00.

question

a. $2.00.

answer

Refer to Figure 6-22. The amount of the tax per unit is

a. $2.00.

b. $1.50.

c. $3.00.

d. $0.50.

question

b. $1.50.

answer

Refer to Figure 6-22. Buyers pay how much of the tax per unit?

a. $0.50.

b. $1.50.

c. $3.00.

d. $5.00.

question

a. $0.50.

answer

Refer to Figure 6-22. Sellers pay how much of the tax per unit?

a. $0.50.

b. $1.50.

c. $3.00.

d. $5.00.

1 of 27

question

True

answer

T/F: Policymakers use taxes to raise revenue for public purposes and to influence market outcomes.

question

False

answer

T/F: A price ceiling set above the equilibrium price causes quantity demanded to exceed quantity supplied.

question

False

answer

T/F: If a price ceiling of $2 per gallon is imposed on gasoline, and the market equilibrium price is $1.50, then the price ceiling is a binding constraint on the market.

question

True

answer

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

question

True

answer

T/F: A tax on golf clubs will cause buyers of golf clubs to pay a higher price, sellers of golf clubs to receive a lower price, and fewer golf clubs to be sold.

question

True

answer

T/F: A tax of $1 on sellers shifts the supply curve upward by exactly $1.

question

True

answer

T/F: The wedge between the buyers' price and the sellers' price is the same, regardless of whether the tax is levied on buyers or sellers.

question

True

answer

T/F: Whether a tax is levied on sellers or buyers, buyers and sellers usually share the burden of taxes.

question

False

answer

T/F: The tax incidence depends on whether the tax is levied on buyers or sellers.

question

True

answer

T/F: Who bears the majority of a tax burden depends on the relative elasticity of supply and demand.

question

c. policymakers believed that the price that prevailed in that market in the absence of price controls was unfair to buyers or sellers.

answer

question

d. All of the above are correct.

answer

question

c. some sellers benefit, and some sellers are harmed.

answer

question

c. decrease, and the price received by sellers will increase.

answer

question

c. supply curve upward by the amount of the tax.

answer

question

a. increase by less than $5.

answer

question

d. $4

answer

Refer to Figure 6-21. What is the amount of the tax per unit?

a. $1

b. $2

c. $3

d. $4

question

d. $12.00.

answer

Refer to Figure 6-21. The price that buyers pay after the tax is imposed is

a. $8.00.

b. $9.00.

c. $10.50.

d. $12.00.

question

a. $8.00

answer

Refer to Figure 6-21. Acme, Inc. is a seller of the good. Acme sells a unit of the good to a buyer and then pays the tax on that unit to the government. Acme is left with how much money?

a. $8.00

b. $9.00

c. $10.50

d. $12.00

question

c. $420

answer

Refer to Figure 6-21. In the after-tax equilibrium, how much revenue does the government collect from the tax on this good?

a. $210

b. $345

c. $420

d. $480

question

a. $3.50.

answer

Refer to Figure 6-22. The equilibrium price in the market before the tax is imposed is

a. $3.50.

b. $5.00.

c. $2.00.

d. $1.50.

question

b. The sellers send the tax payment.

answer

Refer to Figure 6-22. As the figure is drawn, who sends the tax payment to the government?

a. The buyers send the tax payment.

b. The sellers send the tax payment.

c. A portion of the tax payment is sent by the buyers, and the remaining portion is sent by the sellers.

d. The question of who sends the tax payment cannot be determined from the graph.

question

c. $5.00.

answer

Refer to Figure 6-22. The price paid by buyers after the tax is imposed is

a. $3.00.

b. $3.50.

c. $5.00.

d. $6.00.

question

d. $3.00.

answer

Refer to Figure 6-22. The effective price sellers receive after the tax is imposed is

a. $2.00.

b. $3.50.

c. $5.00.

d. $3.00.

question

a. $2.00.

answer

Refer to Figure 6-22. The amount of the tax per unit is

a. $2.00.

b. $1.50.

c. $3.00.

d. $0.50.

question

b. $1.50.

answer

Refer to Figure 6-22. Buyers pay how much of the tax per unit?

a. $0.50.

b. $1.50.

c. $3.00.

d. $5.00.

question

a. $0.50.

answer

Refer to Figure 6-22. Sellers pay how much of the tax per unit?

a. $0.50.

b. $1.50.

c. $3.00.

d. $5.00.

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Microeconomics Chapter Six

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