Chap 06
Chap 06
Chap 06
The short
run effect of a decrease in the supply of housing is a ________ in the rent and ________ in the quantity of housing units. A)
rise; a
B)
decrease
rise; an
C)
increase
fall; a
D)
decrease
fall; an
increase Answer:
Topic :
Recognition
2)
In the of a rent ceiling, the long run adjustment to an initial decrease in the supply of absence housing is A)
a decrease
B)
a decrease
C)
Topic :
Recognition
The above
table gives the demand schedule and the supply schedule for housing in Anytown, U.S.A. If a price ceiling of $300 is imposed in the housing market, then A)
the market
D)
Topic :
Analytical
4)
The above
table gives the demand schedule and the supply schedule for housing in Anytown, U.S.A. If a price ceiling of $600 was imposed in the housing market, then A)
the market
D)
Topic :
Analytical
5)
In the above
figure, which of the following shifts shows the effect of severe flooding that destroys many of the apartment buildings in Bigtown? A)
from S1 to
B)
S2
from S2 to
C)
S1
from D1 to
D)
D2
from D2 to D1 Answer:
Topic :
Recognition
6)
A rent
Discriminatio n as landlords choose their tenants, possibly based on race, age, or gender. C)
apartments whereby higher rents are obtained through various other charges.
All of the
Topic :
Analytical
7)
When a ceiling is imposed in a housing market, the opportunity cost of housing equals the rent A)
rent.
B)
market
C)
value of the time and resources spent searching plus the rent. D)
Topic :
Conceptual
8)
A rent
Discriminatio n as tenants choose their landlords, possibly based on race, age, or gender. C)
apartments whereby higher rents are obtained through various other charges.
In the long- run, more and more people will want to become landlords. Answer:
Topic :
Analytical
9)
The above
figure shows the apartment rental market in Bigtown. At what rent will there be neither a shortage nor a surplus of apartments? A)
$1250 per
B)
month
$1000 per
C)
month
$750 per
D)
month
$500 per
month Answer:
Topic :
Recognition
10)
The above
figure shows the apartment rental market in Bigtown. If severe flooding resulted in the destruction of many of the city's apartment buildings, then the A)
supply curve of apartments would shift leftward and rent would rise above $750.00. B)
demand
C)
curve for apartments would shift rightward and rent would rise above $750.00.
equilibrium market price of apartments rented would fall below $750.00. Answer:
Topic :
Analytical
11)
The above
figure shows the apartment rental market in Bigtown. If the Bigtown Housing Authority imposes a rent ceiling below $750 per month, the rent ceiling will help A)
all renters.
B)
all landlords. D)
some
Topic :
Analytical
12)
The above
figure shows the apartment rental market in Bigtown. If the Bigtown Housing Authority imposes a rent ceiling above $750 per month, the ceiling will A)
help all
B)
renters.
help some
C)
help all
D)
landlords.
have no
Topic :
Analytical
13)
shows the apartment rental market in Bigtown. If there is a shortage of 200,000 apartments in the Bigtown rental market, it may be because the Bigtown Housing Authority has imposed a rent A)
ceiling of
B)
$750.00 monthly.
ceiling of
C)
$500.00 monthly.
floor of
D)
$750.00 monthly.
floor of
Topic :
Analytical
14)
shows the apartment rental market in Bigtown. If the market is in equilibrium and then the Bigtown Housing Authority imposes a rent ceiling of $500 per apartment, which of the following would occur? A)
a decrease
B)
Topic :
Analytical
15)
The above
figure shows the apartment rental market in Bigtown. If the Bigtown Housing Authority imposes a rent ceiling of $500 per apartment, the deadweight loss will be A)
$1,000,000. B)
$500,000.
C)
$250,000.
D)
$125,000. Answer:
Topic :
Analytical
16)
The figure
above shows the demand for and supply of rental housing in Smallton. If a rent ceiling is set at $800, how many apartment units are rented? A)
2,000
B)
3,000
C)
4,000
D)
Topic :
Analytical*
17)
The figure
above shows the demand for and supply of rental housing in Smallton. If a rent ceiling is set at $800, what is the rent? A)
$800
B)
$600
C)
$400
D)
Topic :
Analytical
18)
The figure
above shows the demand for and supply of rental housing in Smallton. If a rent ceiling is set at $800, there is A)
neither a
Topic :
Analytical*
19)
The figure
above shows the demand for and supply of rental housing in Smallton. If a rent ceiling is set at $400, how many apartment units are rented? A)
2,000
B)
3,000
C)
4,000
D)
Topic :
Analytical*
20)
The figure
above shows the demand for and supply of rental housing in Smallton. If a rent ceiling is set at $400, what is the rent? A)
$800
B)
$600
C)
$400
D)
Topic :
Analytical
21)
The figure
above shows the demand for and supply of rental housing in Smallton. If a rent ceiling is set at $400, there is A)
neither a
Topic :
Analytical*
22)
result of an effective rent ceiling? I. equity in the housing market II. efficient allocation of resources III. a shortage of housing units. A)
I and II
B)
I and III
C)
II only
D)
III only
Answer:
Topic :
Conceptual
23)
A rent
a loss of
D)
a gain of
Topic :
Analytical
24)
A rent
an efficient
B)
allocation of housing.
a surplus of housing. C)
Topic :
Analytical
25)
A rent
from only
B)
from only
C)
from both
D)
that exactly offsets the gains in consumer and producer surplus. Answer:
Topic :
Analytical
26)
Which of the
a rent floor
B)
a sales tax
D)
Topic :
Conceptual
27)
A rent
a loss of
D)
a gain of
Topic :
Conceptual
28)
shows the housing market in the city of Appleville. A rent ceiling of $650 per month is imposed. With the rent ceiling, the quantity of housing rented in Appleville is A)
200 units
B)
100 units
C)
300 units
D)
efficient.
Answer:
Topic :
Analytical*
29)
shows the housing market in the city of Appleville. A rent ceiling of $650 per month is imposed. With the rent ceiling, the deadweight loss in the Appleville housing market is A)
zero.
B)
at least
C)
at most
D)
Topic :
Analytical*
30)
shows the housing market in the city of Appleville. A rent ceiling of $650 per month is imposed. With the rent ceiling, what is the maximum black market rent in Appleville? A)
$650 per
B)
month
$700 per
C)
month
$750 per
D)
month
$800 per
month Answer:
Topic :
Analytical*
31)
The above
figure shows the demand and supply curves for housing. What would be the effects of a rent ceiling equal to $500 per month? A)
a surplus
B)
a shortage
C)
a shortage
D)
nothing
because the rent ceiling has no effect on the equilibrium price and quantity Answer:
Topic :
Conceptual
32)
The above
figure shows the demand and supply curves for housing As a result of a rent ceiling at $500, the deadweight loss is represented by the area A)
rectangle
B)
feag.
triangle gfe. C)
triangle eca. D)
Topic :
Conceptual
33)
A hurrican e sweeps
through New Orleans and destroys a substantial portion of available housing. The pre-hurricane housing market for New Orleans is illustrated in the above figure. In the absence of rent controls, the short-run market response will be to move to a new equilibrium in the above figure at a price-quantity combination such as A)
$600 and
B)
100,000 units.
$800 and
C)
200,000 units.
$800 and
D)
400,000 units.
Topic :
Analytical
34)
A hurrican e sweeps
through New Orleans and destroys a substantial portion of available housing. The pre-hurricane housing market for New Orleans is illustrated in the above figure. In the absence of rent controls, a perfectly elastic long-run supply curve of housing would lead to a post-hurricane price-quantity combination in the long run of A)
$600 and
B)
300,000 units.
$600 and
C)
100,000 units.
$800 and
D)
400,000 units.
Topic :
Analytical
35)
A hurrican e sweeps
through New Orleans and destroys a substantial portion of available housing. The pre-hurricane housing market for New Orleans is illustrated in the above figure. Assume that the housing market in New Orleans has a rent ceiling in place at $600 per unit. In the short-run, the post-hurricane quantity of housing may be A)
200,00 units. B)
300,000
C)
units.
400,000
D)
units.
500,000
units. Answer:
Topic :
Analytical
36)
New Orleans and destroys a substantial portion of available housing. The prehurricane housing market for New Orleans is illustrated in the above figure. Assume that the housing market in New Orleans has a rent ceiling in place at $600 per unit. A maximum black market rent of $800 could be charged for which of the following quantities? A)
200,00 units B)
300,000
C)
units
400,000
D)
units
500,000
units Answer:
Topic :
Analytical
37)
A price
ceiling is a price A)
Both
Topic :
Recognition
38)
A price
inefficiency B)
black
C)
markets
increased
D)
search activities
All of the
Topic :
Analytical
39)
Price
increase
B)
producer surplus.
decrease
C)
producer surplus.
might
Topic :
Recognition
40)
A price
always
B)
results in a surplus.
always
C)
results in a shortage.
results in a
D)
results in a shortage if the ceiling price is less than the equilibrium price. Answer:
Topic :
Recognition
41)
Which
of the following is a typical effect of a price ceiling set below the equilibrium price? A)
Less of the
B)
good is produced with the ceiling than would be produced without the ceiling.
The price
C)
Consumers more than they can at the equilibrium price because the ceiling price is lower. can buy D)
Topic :
Recognition
42)
Which of the
following is NOT a potential impact of an effective price ceiling, such as a rent ceiling? A)
a surplus
B)
an increase in search C)
D)
deadweight loss
None of the above because they are all potential impacts of an effective price ceiling. Answer:
Topic :
Conceptual
43)
Which
a shortage
B)
use of non- such as discrimination to allocate the price-controlled good to consumers price factors C)
All of the
Topic :
Conceptual
44)
above the
B)
equilibrium price
below the
D)
equilibrium price
by suppliers Answer:
Topic :
Recognition
45)
A price is a regulated ________ that must be set below the equilibrium price to have an effect. ________ A)
floor; price
B)
floor;
C)
quantity
ceiling; price D)
ceiling;
quantity Answer:
Topic :
Recognition
46)
________ illegal activity between buyers and sellers sometimes used to evade a price ceiling. is an A)
Increased
B)
search activity
A price floor C)
Creating a
D)
shortage
A black
market Answer:
Topic :
Conceptual
47)
In the
U.S. economy, wage rates for various types of labor are determined primarily by A)
the federal
B)
government.
labor unions. C)
the supply
D)
Topic :
Conceptual
48)
In the of a minimum wage, the short-run effect of a decrease in the demand for labor is a absence ________ in the equilibrium wage rate and ________ in the equilibrium employment. A)
rise; a
B)
decrease
rise; an
C)
increase
fall; a
D)
decrease
fall; an
increase Answer:
Topic :
Conceptual
49)
In the
minimum
B)
supply of
D)
Topic :
Conceptual
50)
The initial
effect of a labor saving invention, such as automatic teller machines in the banking industry, is a A)
rightward
B)
rightward
D)
Topic :
Conceptual
51)
Suppos long-run supply of labor is perfectly elastic. Then in the long run, compared to the e that initial equilibrium, a labor saving invention, such as automatic teller machines in the the banking industry, results in A)
a decrease
B)
a decrease
C)
a decrease
D)
Topic :
Conceptual
52)
In the of a minimum wage, the long-run adjustment to a decrease in the demand for labor absence is A)
a decrease
B)
a decrease
C)
an increase in the demand for labor due to the lower wage rate. D)
an increase in the demand for labor due to the surplus of labor. Answer:
Topic :
Conceptual
53)
In the
U.S. economy, wage rates for various types of labor are determined primarily by A)
the federal
B)
government.
businesses. C)
the supply
D)
Topic :
Recognition
54)
The initial
effect of a labor-saving invention, such as automatic teller machines in the banking industry, is a ________ shift of the ________ curve for labor. A)
rightward;
B)
demand
leftward;
C)
demand
rightward;
D)
supply
leftward;
supply Answer:
Topic :
Conceptual
55)
In the shortrun,
with no minimum wage, the introduction of labor-saving inventions in a market for low-skilled labor will ________ the equilibrium wage rate and ________ the equilibrium quantity of employment. A)
raise;
B)
increase
raise;
C)
decrease
lower;
D)
increase
lower;
decrease Answer:
Topic :
Analytical
56)
In the long-
run, with no minimum wage, the introduction of labor-saving inventions in a market for low-skilled labor will result in A)
All of the
Topic :
Recognition
57)
A price
floor is a price A)
that creates a surplus of the good if it is set above the equilibrium price. D)
Both
Topic :
Recognition
58)
An
rent control. B)
minimum
C)
wage.
subsidy.
D)
quota.
Answer:
Topic :
Recognition
59)
minimum wage A)
is an
B)
can reduce
C)
result in
D)
leads to
Topic :
Recognition
60)
A m wage is a government-imposed price ________ that is designed to be ________ the minimu equilibrium wage rate. A)
ceiling;
B)
above
ceiling;
C)
below
floor; above D)
Topic :
Recognition
61)
create a
B)
shortage of labor.
create a
C)
surplus of labor.
have no effect D)
because the equilibrium level of employment is not affected by a minimum wage above the equilibrium wage.
create a
lower wage rate for skilled workers than for unskilled workers. Answer:
Topic :
Conceptual
62)
Suppos equilibrium wage in the low-skilled labor market is $6.25. Further, suppose the e that federal government raises the minimum wage to $6.00 an hour from its present level the of $5.15. The government's action of increasing the minimum wage will result in A)
a decrease
B)
in unemployment.
an increase in unemployment. C)
neither a
Topic :
Conceptual
63)
The
minimum wage A)
is a type of
C)
price floor.
usually
D)
Both
Topic :
Conceptual
64)
The
price ceiling. B)
tax.
C)
quota.
D)
Topic :
Recognition
65)
Suppos equilibrium wage is $10 per hour. A minimum wage is a ________ and affects e the employment if it is set at ________. A)
price floor;
B)
price floor;
C)
$8 per hour
Topic :
Analytical
66)
If policy believe that the equilibrium wage rate is too low, policy makers can raise wages by makers legislating a "minimum wage," that is, a wage A)
Topic :
Analytical
67)
The
increase
B)
reduce the
D)
give small businesses an equal chance in the marketplace with larger businesses. Answer:
Topic :
Analytical
68)
In the above
figure, if the minimum wage is equal to ________, there would be ________ hours of labor employed. A)
Topic :
Recognition
69)
suppose a minimum wage of $8 per hour is imposed. As a result, the quantity of labor supplied is ________ hours and the quantity of labor demanded is ________ hours. A)
3,000; 4,000 B)
4,000; 4,000 C)
2,000; 4,000 D)
Topic :
Analytical
70)
In the above
figure, if there is no minimum wage, the equilibrium employment is ________; if the government imposed a minimum wage of $8 per hour, employment is ________. A)
Topic :
Analytical
71)
In the above
figure, if the government imposed a minimum wage of $8 per hour in this labor market, the increase in the hourly wage for those who are able to keep their jobs is A)
$2 per hour. B)
$4 per hour. C)
$6 per hour. D)
Topic :
Recognition
72)
In the above
figure, a minimum wage has an effect on the market for low-skilled labor if it is set at A)
$2.00.
B)
$3.00.
C)
$4.00.
D)
all of the
above Answer:
Topic :
Analytical
73)
In the above
figure, if the minimum wage is set at $5.00 per hour, what effect will it have on the market for low-skilled labor? A)
The
B)
minimum wage will have no effect when set above the equilibrium wage rate.
The
C)
The
D)
The wage will attract more labor to the low-skilled labor market and cause the wage minimum rate to fall. Answer:
Topic :
Analytical
74)
The figure
above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $4 per hour, how many hours do students work? A)
12,000 hours B)
9,000 hours C)
6,000 hours D)
Topic :
Analytical
75)
shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $4 per hour, how many hours of students' labor are unemployed? A)
12,000 hours B)
9,000 hours C)
6,000 hours D)
0 hours
Answer:
Topic :
Analytical
76)
The figure
above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $6 per hour, how many hours do students work? A)
12,000 hours B)
9,000 hours C)
6,000 hours D)
Topic :
Analytical
77)
shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $6 per hour, how many hours of students' labor are unemployed? A)
12,000 hours B)
9,000 hours C)
6,000 hours D)
0 hours
Answer:
Topic :
Analytical
78)
The figure
above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $8 per hour, how many hours do students work? A)
12,000 hours B)
9,000 hours C)
6,000 hours D)
Topic :
Analytical
79)
shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $8 per hour, how many hours of students' labor are unemployed? A)
12,000 hours B)
9,000 hours C)
6,000 hours D)
0 hours
Answer:
Topic :
Analytical
80)
In the above
figure, which wage rate could be an effective minimum wage that changes the wage rate and what would be the resulting level of employment? A)
A wage of B)
A wage of C)
A wage of D)
Topic :
Recognition
81)
shows the market for low-skilled labor in Midland city. The government sets a minimum wage at $6 per hour. The minimum wage ________ the employers' surplus by ________ million per year. A)
decreases;
B)
$60
decreases;
C)
$120
increases;
D)
$40
Topic :
Analytical*
82)
the market for low-skilled labor in Midland city. The government sets a minimum wage at $6 per hour. With the minimum wage law enacted, at the quantity of labor employed, the value to the firm of last worker hired is ________ the wage rate for which that person is willing to work. A)
the same as B)
Topic :
Analytical*
83)
shows the market for low-skilled labor in Midland city. The government sets a minimum wage at $6 per hour. With the minimum wage law enacted, the potential loss from job search in Midland city is A)
$60 million. B)
$120 million. C)
$40 million. D)
zero.
Answer:
Topic :
Analytical*
84)
If a
will increase. B)
will not
C)
change.
will
D)
decrease.
may increase,
decrease or not change depending on how the supply of labor is affected by the minimum wage. Answer:
Topic :
Conceptual
85)
Imposin g a minimum wage that is above the equilibrium wage rate results in A)
higher job
B)
search costs.
lower
C)
unemployment.
the labor
D)
Topic :
Conceptual
86)
The govern
ment raises the sales tax on shirts. The tax is imposed on sellers. As a result, the ________. A)
demand
D)
demand
Topic :
Analytical
87)
As long supply curve for a good is upward sloping and the demand curve is downward as the sloping, a sales tax imposed on sellers shifts the supply curve A)
rightward
D)
Topic :
Analytical
88)
The y of demand for chocolate chip cookies is 0.6 and the elasticity of supply for these elasticit cookies is 1.9. If a tax is imposed on purchases of chocolate chip cookies, then the A)
consumers
B)
producers
C)
consumers the entire tax because their demand is less elastic than the producers' supply. would pay Answer:
Topic :
Conceptual
89)
A sales imposed on sellers shifts the supply curve leftward for the taxed good because the tax A)
tax is paid
B)
by the seller to the government and is, therefore, like a cost of production.
tax is
C)
actually shifted entirely onto the buyer who can afford only a smaller supply.
Topic :
Conceptual
90)
When a tax is imposed on sellers, the supply curve shifts so that the vertical distance sales between the old and the new supply curve equals the A)
sales tax
B)
sales tax
C)
amount of
D)
sales tax
Topic :
Conceptual
91)
In the above
figure, the government has imposed a tax on sellers of pizza. The amount of the tax A)
is $10.
B)
is $30.
C)
is $40.
D)
Topic :
Analytical
92)
In the above
figure, the government has imposed a tax on sellers of pizza. The tax increases the A)
amount
C)
after-tax
D)
price by $40.
quantity of pizza sold from 40 million per year to 60 million per year. Answer:
Topic :
Analytical
93)
the government has imposed a tax on sellers of pizza. After the tax has been imposed, the after-tax price of a pizza is ________ and the equilibrium quantity is ________ per year. A)
$10; 60
B)
million
$20; 40
C)
million
$20; 20
D)
million
$30; 20
million Answer:
Topic :
Analytical
94)
the government has imposed a tax on sellers of pizza. Before the tax, consumers paid ________ for a pizza and after the tax is imposed, consumers pay ________ for a pizza. A)
$20; $20
B)
$20; $30
C)
$10; $40
D)
$20; $40
Answer:
Topic :
Analytical
95)
In the above
figure, the government has imposed a tax on sellers of pizza. From this tax, the government will receive total tax revenues equal to A)
$2,400
B)
million.
$800 million. C)
$600 million. D)
Topic :
Analytical
96)
The figure
above shows the market for coffee in Roastboro. If a tax on coffee of 75 cents per pound is imposed on sellers, what is the price that buyers pay? A)
$3.50 a
B)
pound
$3.75 a
C)
pound
$4.50 a
D)
pound
$4.75 a
pound Answer:
Topic :
Analytical
97)
The figure
above shows the market for coffee in Roastboro. If a tax on coffee of 75 cents per pound is imposed on sellers, what is the price that sellers receive and keep? A)
$3.50 a
B)
pound
$3.75 a
C)
pound
$4.50 a
D)
pound
$4.75 a
pound Answer:
Topic :
Analytical
98)
The figure
above shows the market for coffee in Roastboro. If a tax on coffee of 75 cents per pound is imposed on sellers, how many pounds of coffee are sold per day? A)
60 pounds
B)
90 pounds
C)
120 pounds D)
Topic :
Analytical
99)
The figure
above shows the market for coffee in Roastboro. If a tax on coffee of 75 cents per pound is imposed on sellers, what is the government's tax revenue per day? A)
$67.50
B)
$90
C)
$405
D)
$337.50
Answer:
Topic :
Analytical
100)
The figure
above shows the market for coffee in Roastboro. If a tax on coffee of 75 cents per pound is imposed on sellers, how much of the tax is paid by buyers? A)
75
B)
50
C)
25
D)
Answer:
Topic :
Analytical
101)
The figure
above shows the market for coffee in Roastboro. If a tax on coffee of 75 cents per pound is imposed on sellers, how much of the tax is paid by sellers? A)
75
B)
50
C)
25
D)
Answer:
Topic :
Analytical
102)
In the above
figure, a sales tax of $1 per unit imposed on sellers ________ the price buyers pay and ________ the price that suppliers keep for themselves. A)
does not
C)
affect; affects
does not
D)
affects;
affects Answer:
Topic :
Analytical
103)
In the
above figure, a sales tax of $1 per unit imposed on sellers shifts the A)
demand
B)
curve rightward.
demand
D)
curve leftward.
Topic :
Analytical
104)
A tax is on the sale of a product. As long as neither the supply nor the demand is perfectly imposed elastic or inelastic, A)
there is no
B)
the price
C)
the price
D)
paid by the consumers increases by less than the amount of the tax.
the price
paid by the consumers increases by more than the amount of the tax. Answer:
Topic :
Recognition
105)
The buyers
pay the entire sales tax levied on a good when demand is perfectly ________ or supply is perfectly ________. A)
elastic;
B)
inelastic
elastic;
C)
elastic
inelastic;
D)
inelastic
inelastic;
elastic Answer:
Topic :
Recognition
106)
The sellers
pay the entire sales tax levied on a good when demand is perfectly ________ or supply is perfectly ________. A)
elastic;
B)
inelastic
elastic;
C)
elastic
inelastic;
D)
inelastic
inelastic;
elastic Answer:
Topic :
Recognition
107)
Suppos government places a sales tax on hotel rooms and that the demand for these rooms e the is elastic while the supply is perfectly inelastic. The tax incidence is such that the tax local will be paid by A)
only the
B)
consumers.
equally by
C)
only the
D)
producers.
the
taxpayers. Answer:
Topic :
Conceptual
108)
Under the following situations would a sales tax on local telephone service be paid for by which of both producers and consumers? A)
Supply of
C)
In none of the above cases will both the producers and consumers pay part of the tax. Answer:
Topic :
Conceptual
109)
The supply
of oil is more elastic than the demand for oil. If oil is taxed $10 per barrel, how will the tax be divided between the buyers and sellers? A)
The sellers
B)
The buyers
C)
The sellers
D)
Topic :
Conceptual
110)
The
level of
B)
government (for example, local, state, or federal) which imposes the tax.
federal
C)
price
Topic :
Conceptual
111)
in general
B)
in general
C)
the pay a larger part of the tax as the demand for the product becomes less elastic. demanders D)
the pay a larger part of the tax as the demand for the product becomes more demanders elastic. Answer:
Topic :
Analytical
112)
Which
Topic :
Analytical
113)
Which
Topic :
Analytical
114)
The
more elastic the demand and the more inelastic the supply. B)
more
C)
more
D)
Topic :
Conceptual
115)
The
more elastic the demand and the more inelastic the supply. B)
more
C)
more
D)
Topic :
Conceptual
116)
Suppos e a $1 tax is placed on a good. The more elastic the supply of the good, the A)
larger the
B)
less of the
D)
Topic :
Conceptual
117)
The of a tax paid by the sellers will be larger the more ________ the demand and the more amount ________ the supply. A)
elastic;
B)
inelastic
inelastic;
C)
elastic
inelastic;
D)
inelastic
elastic;
elastic Answer:
Topic :
Conceptual
118)
The of a tax paid by the sellers will be smaller the more ________ the demand and the amount more ________ the supply. A)
elastic;
B)
inelastic
inelastic;
C)
elastic
inelastic;
D)
inelastic
elastic;
elastic Answer:
Topic :
Conceptual
119)
The govern
ment imposes a sales tax on hot dogs. The tax would be paid entirely by hot dog sellers if the A)
supply is
B)
perfectly elastic.
supply is
C)
perfectly inelastic.
demand is
D)
perfectly inelastic.
Topic :
Conceptual
120)
The govern
ment imposes a sales tax on hot dogs. The tax would be paid entirely by the hot dog buyers if the A)
supply is
B)
perfectly elastic.
supply is
C)
perfectly inelastic.
demand is
D)
perfectly elastic.
Topic :
Analytical
121)
and imposes a tax on sellers of salt. The tax is $0.10 per pound. With no tax, the price of salt is $0.40 per pound. The demand for salt is perfectly inelastic and the elasticity of supply is 1.5. With the tax, the price of salt paid by buyers in Healthyland is A)
$0.40 per
B)
pound.
$0.45 per
C)
pound.
$0.35 per
D)
pound.
Topic :
Analytical*
122)
and imposes a tax on sellers of salt. The tax is $0.10 per pound. With no tax, the market price of salt is $0.40 per pound. The demand for salt is perfectly inelastic, and the elasticity of supply is 1.5. With the tax, the price that sellers of salt in Healthyland receive and keep is A)
$0.40 per
B)
pound.
$0.35 per
C)
pound.
$0.45 per
D)
pound.
Topic :
Analytical*
123)
and imposes a tax on sellers of salt. The tax is $0.10 per pound. With no tax, the price of salt is $0.40 per pound. The demand for salt is perfectly inelastic and the elasticity of supply is 1.5. How is the salt tax burden shared between buyers and sellers in Healthyland? A)
Sellers pay
B)
Buyers pay
C)
Topic :
Analytical*
producing and selling hamburgers, french fries, pizza, and ice cream. The mayor plans to impose a tax on one of these products. Based on the elasticities in the above table, as a profit-minded business person who seeks to avoid taxes whenever possible, which good would you most prefer to have taxed? A)
hamburgers B)
pizza
C)
French fries D)
Topic :
Analytical
125)
producing and selling hamburgers, french fries, pizza, and ice cream. The mayor plans to impose a tax on one of these products. Based on the elasticities in the above table, as a profit-minded business person who seeks to avoid taxes whenever possible, which good would you least like to have taxed? A)
hamburgers B)
pizza
C)
French fries D)
Topic :
Analytical
126)
You are s of producing and selling hamburgers, french fries, pizza, and ice cream. The mayor in the plans to impose a tax on one of these products. Based on the elasticities in the above busines table, on which of these goods would your customers least like to be taxed? A)
hamburgers B)
pizza
C)
French fries D)
Topic :
Analytical
127)
You are s of producing and selling hamburgers, french fries, pizza, and ice cream. The mayor in the plans to impose a tax on one of these products. Based on the elasticities in the above busines table, on which of these goods would your customers most prefer to be taxed? A)
hamburgers B)
pizza
C)
French fries D)
Topic :
Analytical
128)
The whether to tax either Good A or Good B. The equilibrium quantity of both is currently govern the same, but the elasticity of demand for Good A is 0.8 while the elasticity of ment is demand for Good B is 1.5. In order to generate the most tax revenues, the deciding government should impose the tax on ________ because its demand is ________. A)
Good A;
C)
more elastic
Good B;
Topic :
Conceptual
129)
If a tax
buyers pay
B)
sellers pay
C)
neither the buyers nor the sellers pay the tax. Answer:
Topic :
Conceptual
130)
only the
B)
buyers.
only the
C)
sellers.
both the
D)
Topic :
Analytical
131)
only the
B)
buyers.
only the
C)
sellers.
both the
D)
Topic :
Analytical
132)
Which
Taxes always create more deadweight loss than do price ceilings and price floors. B)
Taxes decrease C)
both consumer surplus and producer surplus while creating a deadweight loss.
Government from a tax is always greater than the loss of producer surplus and consumer revenue surplus. D)
Both
Topic :
Analytical
133)
Suppos e a tax is imposed on sellers. The more inelastic the demand for a taxed item, the A)
larger the
D)
All of the
Topic :
Recognition
134)
If a
the
B)
C)
producer
D)
All of the
Topic :
Conceptual
135)
equilibrium price is $10 and the equilibrium quantity is 200. A $0.50 per unit tax is imposed on the sellers of the product which increases the price consumers pay to $10.40 and reduces the quantity sold to 180. The total tax revenue collected by the government is A)
$180.
B)
$100.
C)
$90.
D)
$72.
Answer:
Topic :
Analytical
136)
The above
figure shows the market for blouses. The government decides to impose the sales tax shown in the figure on sellers. Using the figure, what is the tax per blouse? A)
$10 per
B)
blouse
$20 per
C)
blouse
$30 per
D)
blouse
$40 per
blouse Answer:
Topic :
Recognition
137)
shows the market for blouses. The government decides to impose the sales tax shown in the figure on sellers. Using the figure, how much tax revenue does the government raise? A)
$20,000
B)
$40,000
C)
$60,000
D)
$80,000
Answer:
Topic :
Recognition
138)
The above
figure shows the market for blouses. The government decides to impose the sales tax shown in the figure on sellers. The tax decreases consumption by A)
1,000
B)
blouses.
2,000
C)
blouses.
3,000
D)
blouses.
4,000
blouses. Answer:
Topic :
Recognition
139)
shows the market for blouses. The government decides to impose the sales tax shown in the figure on sellers. The amount of the tax paid by buyers would be greater than shown in the figure A)
only if the
B)
only if the
C)
only if the
D)
if either the demand was more inelastic or the supply more elastic. Answer:
Topic :
Analytical
140)
shows the market for blouses. The government decides to impose the sales tax shown in the figure on sellers. The amount of the tax paid by blouse producers would be greater than shown in the figure if A)
the supply
D)
Both
Topic :
Analytical
141)
shows the market for blouses. The government decides to impose the sales tax shown in the figure on sellers. The government would raise more tax revenue from this excise tax if A)
it places a
C)
it places a
D)
all of the
above Answer:
Topic :
Analytical
142)
The above
figure shows the market for blouses. The government decides to impose the sales tax shown in the figure on sellers. How much deadweight loss results? A)
$10,000
B)
$20,000
C)
$30,000
D)
$40,000
Answer:
Topic :
Analytical
143)
The above
figure shows the market for blouses. The government decides to impose the sales tax shown in the figure on sellers. How much consumer surplus is lost? A)
$10,000
B)
$20,000
C)
$25,000
D)
$40,000
Answer:
Topic :
Analytical
144)
The above
figure shows the market for blouses. The government decides to impose the sales tax shown in the figure on sellers. How much producer surplus is lost? A)
$10,000
B)
$20,000
C)
$25,000
D)
$40,000
Answer:
Topic :
Taxes Skill:
Analytical
145)
The above
figure shows the market for anti-freeze. The government imposes the sales tax shown in the figure on sellers. What is the amount of the tax? A)
$1 per gallon B)
$2 per gallon C)
$3 per gallon D)
Topic :
Recognition
146)
shows the market for anti-freeze. The government imposes the sales tax shown in the figure on sellers. How much tax revenue does the government raise from this tax? A)
$2,000
B)
$3,000
C)
$4,000
D)
$6,000
Answer:
Topic :
Recognition
147)
shows the market for anti-freeze. The government imposes the sales tax shown in the figure on sellers. The sales tax on anti-freeze decreases the quantity of antifreeze that automobile owners purchase by A)
0 gallons.
B)
1000
C)
gallons.
2000
D)
gallons.
3000
gallons. Answer:
Topic :
Recognition
148)
shows the market for anti-freeze. The government imposes the sales tax shown in the figure on sellers. Automobile owners would pay a larger part of this tax than what is shown in the figure if the A)
demand
B)
demand
C)
None of the above because the buyers always pay the entire amount of the tax. Answer:
Topic :
Analytical
149)
shows the market for anti-freeze. The government imposes the sales tax shown in the figure on sellers. Anti-freeze sellers would pay a larger part of this tax than what is shown in the figure if the A)
demand
B)
demand
C)
Topic :
Analytical
150)
The above
figure shows the market for anti-freeze. The government imposes the sales tax shown in the figure on sellers. What is the deadweight loss from this tax? A)
$1,500
B)
$3,000
C)
$4,500
D)
$6,000
Answer:
Topic :
Analytical
151)
In
agricultural markets, once the crop has been harvested, the supply is A)
perfectly
B)
inelastic.
perfectly
C)
elastic.
elastic but
D)
Topic :
Conceptual
152)
Suppos is a bumper harvest of soybeans, demand is inelastic for soybeans, and momentary e there supply is perfectly inelastic. Then, the bountiful harvest will result in A)
Topic :
Conceptual
153)
Assume demand for wheat is inelastic and that the momentary supply of wheat is perfectly that the inelastic. Then, a poor harvest will result in which of the following? A)
Topic :
Conceptual
154)
Suppos weather conditions are ideal so that farmers experience a bumper crop. A bumper e crop ________ total farm revenue because the demand for farm products is ________. A)
raises;
B)
elastic
raises;
C)
inelastic
lowers;
D)
elastic
lowers;
inelastic Answer:
Topic :
Analytical
155)
Which of the
following accurately describes which curve shifts in the corn market following a drought? A)
Topic :
Conceptual
156)
When
the supply curve of corn shifts leftward, farmers' revenue ________ because ________. A)
decreases;
B)
demand is elastic
increases;
C)
demand is inelastic
decreases;
D)
supply is elastic
Topic :
Conceptual
157)
When
the supply curve of corn shifts rightward, farmers' revenue ________ because ________. A)
decreases;
B)
demand is inelastic
increases;
C)
demand is elastic
decreases;
D)
supply is inelastic
Topic :
Conceptual
158)
supply is
B)
elastic.
supply is
C)
inelastic.
demand is
D)
elastic.
Topic :
Conceptual
159)
In the with normal weather conditions the price is $3.00 per bushel and the quantity is 10 market million bushels each year. Using the above figure, if a drought occurs so the for corn, momentary supply curve shifts to MSDrought, what happens to total farm revenue? A)
It decreases. B)
It increases. C)
It does not
D)
change.
It may there is not enough information in the above figure to determine what occurs. change but Answer:
Topic :
Analytical
160)
normal weather conditions the price is $3.00 per bushel and the quantity is 10 million bushels each year. Using the above figure, if the growing conditions are excellent so that the momentary supply curve shifts to MSBumper, what happens to total farm revenue? A)
It decreases. B)
It increases. C)
It does not
D)
change.
It may there is not enough information in the above figure to determine what occurs. change but Answer:
Topic :
Analytical
161)
granting
B)
subsidies.
setting
C)
imposing
Topic :
Subsidies Skill:
Conceptual
162)
The figure
above shows the market for milk in Cowland. If a subsidy paid to producers of $1 per gallon of milk is introduced, what is the price that consumers pay? A)
$3.00 a
B)
gallon
$3.50 a
C)
gallon
$4.00 a
D)
gallon
$4.50 a
gallon Answer:
Topic :
Subsidies Skill:
Analytical
163)
shows the market for milk in Cowland. If a subsidy paid to producers of $1 per gallon of milk is introduced, what is the amount, including the subsidy, that suppliers keep per gallon? A)
$3.00 a
B)
gallon
$3.50 a
C)
gallon
$4.00 a
D)
gallon
$4.50 a
gallon Answer:
Topic :
Subsidies Skill:
Analytical*
164)
The figure
above shows the market for milk in Cowland. If a subsidy paid to producers of $1 per gallon of milk is introduced, how many gallons are sold per year? A)
200 million
B)
250 million
C)
300 million D)
Topic :
Subsidies Skill:
Analytical
165)
shows the market for milk in Cowland. A subsidy paid to producers of $1 per gallon of milk is introduced. If there are no external costs and no external benefits, the quantity of milk sold is A)
50 million
B)
50 million
C)
Topic :
Analytical*
166)
shows the market for milk in Cowland. A subsidy paid to producers of $1 per gallon of milk is introduced. If there are no external costs and no external benefits, the marginal cost of the last gallon of milk produced is A)
$3.00 a
B)
gallon.
$3.50 a
C)
gallon.
$4.00 a
D)
gallon.
$4.50 a
gallon. Answer:
Topic :
Analytical
167)
shows the market for milk in Cowland. A subsidy paid to producers of $1 per gallon of milk is introduced. If there are no external costs and no external benefits, the marginal benefit of the last gallon of milk consumed is A)
$3.50 a
B)
gallon.
$4.00 a
C)
gallon.
$4.50 a
D)
gallon.
$5.00 a
gallon. Answer:
Topic :
Analytical
168)
To try to governments help I. set production quotas farmers, II. set price ceilings A)
B)
II
C)
I and II
D)
Topic :
Recognition
169)
If a on quota is set below the equilibrium quantity, at the quota quantity, marginal producti benefit is ________ marginal cost and the level of production is ________. A)
less than;
D)
inefficient
equal to;
efficient Answer:
Topic :
Conceptual
170)
shows the market for cotton in Georgestan. The government regulates the market with a production quota set at 8 million pounds per year. The price of cotton in Georgestan is A)
Topic :
Analytical*
171)
shows the market for cotton in Georgestan. The government regulates the market with a production quota set at 8 million pounds per year. The introduction of the quota has A)
increased
C)
decreased
D)
Topic :
Analytical*
172)
the market for cotton in Georgestan. The government regulates the market with a production quota set at 8 million pounds per year. With the quota in place, the amount of cotton produced in Georgestan is ________ because the marginal social cost of a pound of cotton is ________ the marginal social benefit of a pound of cotton. A)
inefficient;
B)
less than
inefficient;
C)
greater than
efficient;
equal to Answer:
Topic :
Analytical*
173)
In
demand
D)
demand
Topic :
Conceptual
174)
If s are imposed on the sellers of illegal goods or services, then the equilibrium price penaltie ________ and the equilibrium quantity ________. A)
rises;
B)
increases
rises;
C)
decreases
falls;
D)
increases
falls;
decreases Answer:
Topic :
Analytical
175)
When a ment fines and/or imprisons convicted drug dealers, it is attempting to reduce the govern illegal drug trade by shifting the ________ curve for illegal drugs ________. A)
demand;
B)
rightward
demand;
C)
leftward
supply;
D)
rightward
supply;
leftward Answer:
Topic :
Conceptual
176)
demand
B)
demand
D)
Topic :
Conceptual
177)
When a fines and/or imprisons persons convicted of using illegal drugs, the government is govern attempting to decrease the illegal drug trade by shifting the ________ curve for illegal ment drugs ________. A)
demand;
B)
rightward
demand;
C)
leftward
supply;
D)
rightward
supply;
leftward Answer:
Topic :
Conceptual
178)
In
general, a fine on smoking cigarettes shifts the ________ curve of cigarettes ________. A)
supply;
B)
rightward
supply;
C)
leftward
demand;
D)
rightward
demand;
leftward Answer:
Topic :
Conceptual
179)
If s are imposed only on the buyers of illegal drugs, the equilibrium price of illegal penaltie drugs will ________ and the equilibrium quantity will ________. A)
rise; increase B)
rise;
C)
decrease
fall; increase D)
fall;
decrease Answer:
Topic :
Recognition
180)
In
demand
D)
demand
Topic :
Conceptual
181)
If s are imposed on the buyers of illegal goods or services, then the equilibrium price penaltie ________ and the equilibrium quantity ________. A)
rises;
B)
increases
rises;
C)
decreases
falls;
D)
increases
falls;
decreases Answer:
Topic :
Analytical
182)
When a ment imposes penalties on both sellers and buyers of an illegal good, the price of the govern good ________ and the quantity ________. A)
falls;
B)
decreases
falls; might
C)
Topic :
Analytical
183)
If
penalties for trading illegal drugs are instituted on both buyers and sellers, the A)
quantity
B)
Topic :
Conceptual
184)
When a good is made illegal, which of the following definitely results in the price rising? A)
a much
B)
a much
C)
any fine
D)
any fine
Topic :
A Market for Illegal Goods, Penalties on Both Sellers and Buyers Skill:
Analytical
185)
When a good is made illegal, which of the following definitely results in the price falling? A)
a much
B)
a much
C)
any fine
D)
Both
Topic :
A Market for Illegal Goods, Penalties on Both Sellers and Buyers Skill:
Analytical
186)
Compar the situation in which a good is legal, making the good illegal and imposing ________ ed to results in less being sold. A)
a much
B)
a much
C)
all of the
above Answer:
Topic :
A Market for Illegal Goods, Penalties on Both Sellers and Buyers Skill:
Analytical
187)
If the same
fine is imposed on buyers and sellers of an illegal good so that the cost of breaking the law is the same for both, then A)
there is more government revenue collected than with an excise tax on the good. B)
there is no loss in this market because the extra producer surplus will exactly offset the lost deadweight consumer surplus. C)
the supply
D)
the
Topic :
A Market for Illegal Goods, Penalties on Both Sellers and Buyers Skill:
Analytical
188)
If s are imposed on both the buyers and the sellers of illegal goods or services, then an penaltie effect in the market for the illegal good or service would definitely be A)
a decrease
C)
a decrease
D)
Topic :
A Market for Illegal Goods, Penalties on Both Sellers and Buyers Skill:
Analytical
189)
If
a decrease
C)
a decrease
D)
Topic :
Analytical
190)
If the govern
ment makes a good illegal and then imposes stiffer penalties on illegal drug buyers than on sellers, the price of the good ________ and the quantity ________. A)
falls;
B)
increases
rises;
C)
decreases
falls;
D)
decreases
does not
Topic :
A Market for Illegal Goods, Penalties on Both Sellers and Buyers Skill:
Analytical
191)
If imposed only on sellers (but not on buyers) of marijuana, the equilibrium price of penaltie marijuana will ________, and the equilibrium quantity of marijuana sold will ________. s are A)
rise;
B)
increase
rise;
C)
decrease
fall; increase D)
fall;
decrease Answer:
Topic :
Analytical*
192)
If s are imposed only on buyers (but not on sellers) of marijuana, the equilibrium price penaltie of marijuana ________, and the equilibrium quantity of marijuana sold ________. A)
rise;
B)
increase
rise;
C)
decrease
fall; increase D)
fall;
decrease Answer:
Topic :
Analytical*
193)
Suppos imposed on both buyers and sellers of marijuana, but the cost of breaking the law to e sellers is greater than that to buyers. This measure will ________ the equilibrium price penaltie of marijuana and ________ the equilibrium quantity of marijuana sold. s are A)
lower;
B)
increase
raise;
C)
increase
raise;
D)
decrease
Topic :
A Market for Illegal Goods, Penalties on Both Sellers and Buyers Skill:
Analytical*
194)
Using the
above figure, CBL is the cost of breaking the law. What is the equilibrium price and quantity if beer is legal? A)
Topic :
Recognition
195)
has declared beer to be an illegal substance and imposes a fine on any person caught selling a beer. Buying beer, however, remains legal. Using the above figure, in which CBL is the cost of breaking the law, what is the equilibrium price and quantity with this new law in effect? A)
Topic :
Analytical
196)
has declared beer to be an illegal substance and has imposed penalties on any person caught selling a beer. Buying a beer, however, remains legal. Using the above figure, in which CBL is the cost of breaking the law, beer consumption is decreased by A)
200 quarts. B)
300 quarts. C)
400 quarts. D)
Topic :
Analytical
197)
has declared beer to be an illegal substance and imposes a fine on anyone caught buying a beer. Selling beer, however, remains legal. Using the above figure, in which CBL is the cost of breaking the law, what is the equilibrium price and quantity with this new law in effect? A)
Topic :
Analytical
198)
has declared beer to be an illegal substance and has imposed penalties on any person caught buying a beer. Selling a beer, however, remains legal. Using the above figure, in which CBL is the cost of breaking the law, beer consumption is decreased by A)
200 quarts. B)
300 quarts. C)
400 quarts. D)
Topic :
Analytical
199)
has declared beer to be an illegal substance and has imposed equal penalties on any person caught buying a beer and on any person caught selling a beer. Using the above figure, in which CBL is the cost of breaking the law, what is the equilibrium price and quantity with this new law in effect? A)
Topic :
A Market for Illegal Goods, Penalties on Both Sellers and Buyers Skill:
Analytical
200)
has declared beer to be an illegal substance and has imposed equal penalties on any person caught buying a beer and on any person caught selling a beer. Using the above figure, in which CBL is the cost of breaking the law, beer consumption is decreased by A)
200 quarts. B)
300 quarts. C)
400 quarts. D)
Topic :
A Market for Illegal Goods, Penalties on Both Sellers and Buyers Skill:
Analytical
201)
Which
Penalizing illegal good decreases supply and penalizing buyers decreases demand. sellers of an B)
Penalizing
C)
Taxing a good at a D)
sufficiently high rate can achieve the same consumption level as prohibition.
All of the
Topic :
Conceptual
202)
Rather than
prohibiting a good or service, the government might tax it. Imposing such a tax on a good or service ________ the equilibrium price and ________ the equilibrium quantity. A)
raises;
B)
increases
raises;
C)
decreases
lowers;
D)
increases
lowers;
decreases Answer:
Topic :
Analytical