1B03 2009 QUIZ 5 - QUIZ 5 _ VERSION 1 1. Price controls are...

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QUIZ 5 VERSION 1 ____ 1. Price controls are a. used to make markets more efficient. b. usually enacted when policymakers believe that the market price of a good or service is unfair to buyers or sellers. c. nearly always effective in eliminating inequities. d. established by firms with monopoly power. ____ 2. A price ceiling that is not binding will a. cause a surplus in the market. b. cause a shortage in the market. c. cause the market to be less efficient. d. have no effect on the market price. ____ 3. A binding price floor causes a. excess demand. b. a shortage. c. a surplus. d. equilibrium price to fall. ____ 4. The minimum wage was instituted in order to ensure workers a. a middle-class standard of living. b. employment. c. a minimally adequate standard of living. d. unemployment compensation. Figure 1 ____ 5. Refer to Figure 1 . The amount of the tax that buyers would pay would be a. $1.00. b. $1.50. c. $2.00. d. $3.00.
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____ 6. A tax on the buyers of popcorn a. increases the size of the popcorn market. b. reduces the size of the popcorn market. c. has no effect on the size of the popcorn market. d. may increase, decrease, or have no effect on the size of the popcorn market. ____ 7. A tax placed on the seller of a product will a. raise equilibrium price and lower equilibrium quantity. b. raise both equilibrium price and quantity. c. lower equilibrium price and raise equilibrium quantity. d. lower both equilibrium price and quantity. ____ 8. Which of the following is the most correct statement about tax burdens? a. A tax burden falls most heavily on the side of the market that is elastic. b. A tax burden falls most heavily on the side of the market that is inelastic. c. A tax burden falls most heavily on the side of the market that is closer to unit elastic. d. A tax burden is distributed independently of relative elasticities of supply and demand. ____ 9. Deadweight loss measures the a. loss in a market to buyers and sellers that is not offset by an increase in government revenue. b. loss in revenue to the government when buyers choose to buy less of the product. c. loss of efficiency in a market as a result of government intervention. d. lost revenue to businesses because of higher prices to consumers from the tax. ____ 10. The deadweight economic loss from taxes a. does not depend on tax rates. b. is higher when tax rates are higher than when tax rates are lower. c. is lower when tax rates are higher than when tax rates are lower. d. does not depend on the slope of the demand curve.
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QUIZ 5 VERSION 2 ____ 1. Policymakers choose to enact price controls in a market because a. they believe the market's outcome to be unfair. b. enacting price controls will directly increase tax revenues. c.
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1B03 2009 QUIZ 5 - QUIZ 5 _ VERSION 1 1. Price controls are...

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