chapter 6 - Chapter 6 Supply, Demand, and Government...

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Unformatted text preview: Chapter 6 Supply, Demand, and Government Policies TRUE/FALSE 1. Economic policies often have effects that their architects did not intend or anticipate. ANS: T DIF: 1 REF: 6-0 NAT: Analytic LOC: The study of economics and definitions of economics TOP: Public policy MSC: Definitional 2. Rent-control laws dictate a minimum rent that landlords may charge tenants. ANS: F DIF: 1 REF: 6-0 NAT: Analytic LOC: Supply and demand TOP: Rent control MSC: Definitional 3. Minimum-wage laws dictate the lowest wage that firms may pay workers. ANS: T DIF: 1 REF: 6-0 NAT: Analytic LOC: Labor markets TOP: Minimum wage MSC: Definitional 4. Price controls are usually enacted when policymakers believe that the market price of a good or service is unfair to buyers or sellers. ANS: T DIF: 1 REF: 6-0 NAT: Analytic LOC: Supply and demand TOP: Price controls MSC: Definitional 5. Price controls can generate inequities. ANS: T DIF: 1 REF: 6-0 NAT: Analytic LOC: Supply and demand TOP: Price controls MSC: Definitional 6. Policymakers use taxes to raise revenue for public purposes and to influence market outcomes. ANS: T DIF: 1 REF: 6-0 NAT: Analytic LOC: Supply and demand TOP: Taxes MSC: Definitional 7. If a good or service is sold in a competitive market free of government regulation, then the price of the good or service adjusts to balance supply and demand. ANS: T DIF: 1 REF: 6-1 NAT: Analytic LOC: Supply and demand TOP: Prices MSC: Definitional 8. At the equilibrium price, the quantity that buyers want to buy exactly equals the quantity that sellers want to sell. ANS: T DIF: 1 REF: 6-1 NAT: Analytic LOC: Supply and demand TOP: Prices MSC: Definitional 9. A price ceiling is a legal minimum on the price at which a good or service can be sold. ANS: F DIF: 1 REF: 6-1 NAT: Analytic LOC: Supply and demand TOP: Price ceilings MSC: Definitional 10. A price ceiling set above the equilibrium price is not binding. ANS: T DIF: 2 REF: 6-1 NAT: Analytic LOC: Supply and demand TOP: Price ceilings MSC: Interpretive 115 116 Chapter 6/Supply, Demand, and Government Policies 11. If a price ceiling is not binding, then it will have no effect on the market. ANS: T DIF: 2 REF: 6-1 NAT: Analytic LOC: Supply and demand TOP: Price ceilings MSC: Interpretive 12. To be binding, a price ceiling must be set above the equilibrium price. ANS: F DIF: 2 REF: 6-1 NAT: Analytic LOC: Supply and demand TOP: Price ceilings MSC: Interpretive 13. A price ceiling set below the equilibrium price is binding. ANS: T DIF: 2 REF: 6-1 NAT: Analytic LOC: Supply and demand TOP: Price ceilings MSC: Interpretive 14. A price ceiling set below the equilibrium price causes quantity demanded to exceed quantity supplied. ANS: T DIF: 2 REF: 6-1 NAT: Analytic LOC: Supply and demand TOP: Price ceilings | Shortages MSC: Interpretive 15. A price ceiling set above the equilibrium price causes quantity demanded to exceed quantity supplied....
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This note was uploaded on 03/15/2012 for the course ECON 101 taught by Professor Carlitos during the Spring '11 term at Alaska Bible.

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chapter 6 - Chapter 6 Supply, Demand, and Government...

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