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- 1. Multiple ChoiceIf the government removes a tax on a good, then the price paid by buyers willincrease, and the price received by sellers will increase.increase, and the price received by sellers will decrease.decrease, and the price received by sellers will increase.decrease, and the price received by sellers will decrease.
- 2. Multiple ChoiceA tax imposed on the sellers of a good willraise both the price buyers pay and the effective price sellers receive.raise the price buyers pay and lower 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.
- 3. Multiple ChoiceIf the government levies a $2 tax per DVD on buyers of DVDs, then the price received by sellers of DVDs woulddecrease by more than $2.decrease by exactly $2.decrease by less than $2.increase by an indeterminate amount.
- 4. Multiple ChoiceIf a tax is levied on the buyers of a product, then there will be a(n)downward shift of the demand curve.upward shift of the demand curve.movement up and to the left along the demand curve.movement down and to the right along the demand curve.
- 5. Multiple Choice
The per-unit burden of the tax on buyers is$6$8$14$24 - 6. Multiple ChoiceA price ceiling isoften imposed on markets in which “cutthroat competition” would prevail without a price ceiling.often imposed when sellers of a good are successful in their attempts to convince the government that the market outcome is unfair without a price ceiling.All are correct.a legal maximum on the price at which a good can be sold.
- 7. Multiple ChoiceSuppose the government has imposed a price ceiling on cellular phones. Which of the following events could transform the price ceiling from one that is binding to one that is not binding?Cellular phones become more popular.Traditional land line phones become more expensive.The components used to produce cellular phones become more expensive.A technological advance makes cellular phone production less expensive.
- 8. Multiple ChoiceThe price ceilingcauses a shortage of 45 units of the good.makes it necessary for sellers to ration the good.is not binding because it is set below the equilibrium price.Both orange and red are correct.
- 9. Multiple ChoiceA nonbinding price floor
(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.(iii) only(i) and (iii) only(ii) and (iv) only(iv) only - 10. Multiple ChoiceA price floor set at$4 will be binding and will result in a shortage of 3 units.$4 will be binding and will result in a shortage of 6 units.$7 will be binding and will result in a surplus of 6 units.$7 will be binding and will result in a surplus of 12 units.
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