does not apply to unpaid internships

The imposition of a binding price floor on a market

causes quantity demanded to be less than quantity supplied

A surplus results when a

binding price floor is imposed on a market.

can generate inequities of their own

A tax imposed on the buyers of a good will

raise the price buyers pay and lower the effective price sellers receive

If a price ceiling is not binding, then

the equilibrium price is below the price ceiling.

A tax on the buyers of sofas

decreases the size of the sofa market

If a price floor is not binding, then

the equilibrium price is above the price floor

A tax imposed on the sellers of a good will raise the

price paid by buyers and lower the equilibrium quantity

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Supply, Demand, and Government Policies

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Questions 16

Answers

1
The minimum wage
does not apply to unpaid internships
has its greatest impact on middle-aged and immigrant workers
is an example of a price ceiling
only affects the quantity of labor supplied
2
A legal maximum on the price at which a good can be sold is called a price
floor.
support.
ceiling.
subsidy.
3
The imposition of a binding price floor on a market
causes quantity demanded to be greater than quantity supplied
causes quantity demanded to be equal to quantity supplied
causes a decrease in demand
causes quantity demanded to be less than quantity supplied
4
A surplus results when a
binding price floor is imposed on a market.
nonbinding price floor is removed from a market
binding price floor is removed from a market.
nonbinding price floor is imposed on a market.
5
Price controls
can generate inequities of their own
All of these.
always produce an efficient outcome
always produce a fair outcome
6
If the government levies a $5 tax per ticket on buyers of NFL tickets, then th price paid by buyers of NFL tickets would
increase by more than $5
increase by exactly $5
decrease by an indeterminate amount
increase by less than $5
7
In “Venezuela Versus the Market,” the price control placed on coffee
created a shortage of coffee
resulted in higher profits for coffee growers
increased coffee exports to other countries
increased the amount of land and coffee used in production
8
If a binding price ceiling is imposed on the baby formula market, then
All of the above are correct
the quantity of baby formula supplied will decrease
a shortage of baby formula will develop
the quantity of baby formula demanded will increase
9
A tax imposed on the buyers of a good will
raise both the price buyers pay and the effective price sellers receive
lower the price buyers pay and raise the effective price sellers receive
lower both the price buyers pay and the effective price sellers receive
raise the price buyers pay and lower the effective price sellers receive
10
A legal minimum on the price at which a good can be sold is called a
price subsidy.
price ceiling.
tax.
price floor.
11
If a price ceiling is not binding, then
the equilibrium price is above the price ceiling.
it has no legal enforcement mechanism.
the equilibrium price is below the price ceiling.
None of the above is correct because all price ceilings must be binding.
12
A tax on the buyers of sofas
decreases the size of the sofa market
increases the size of the sofa market.
may increase, decrease, or have no effect on the size of the sofa market
has no effect on the size of the sofa market
13
If a price floor is not binding, then
the equilibrium price is below the price floor
the equilibrium price is above the price floor
there will be a shortage in the market
there will be a surplus in the market
14
If a tax is levied on the sellers of a product, then the demand curve will
become flatter
shift up.
shift down.
not shift.
15
In a free, competitive market, what is the rationing mechanism?
price
government law
buyer bias
seller bias
16
A tax imposed on the sellers of a good will raise the
effective price received by sellers and raise the equilibrium quantity
effective price received by sellers and lower the equilibrium quantity
price paid by buyers and lower the equilibrium quantity
price paid by buyers and raise the equilibrium quantity

Supply, Demand, and Government Policies Flashcards | StudBud