1. Suppose that a regulation is in place that does not allow the price of a good to exceed $5. If this price is above the equilibrium price in the market, this would be an example of a:
a.
binding price ceiling.
b.
not binding price ceiling.
c.
binding price floor.
d.
not binding price floor.
2.
Suppose that a regulation is in place that does not allow the price of a good to fall below $10. If this price is above the equilibrium price in the market, this would be an example of a:
a.
binding price ceiling.
b.
not binding price ceiling.
c.
binding price floor.
d.
not binding price floor.
3.
Suppose that a regulation is in place that does not allow the price of a good to exceed $5. If this price is below the equilibrium price in the market, this would be an example of a:
a.
binding price ceiling.
b.
not binding price ceiling.
c.
binding price floor.
d.
not binding price floor.
4.
If a price floor is in place and it is binding, the market will:
a.
remain in equilibrium, unaffected by the price floor.
b.
experience a shortage.
c.
experience a surplus.
d.
adjust its equilibrium point toward the price floor.
5.
If a price ceiling is in place and it is binding, the market will:
a.
remain in equilibrium, unaffected by the price floor.
b.
experience a shortage.
c.
experience a surplus.
d.
adjust its equilibrium point toward the price floor.
6.
If a price floor is in place and it is not binding, the market will:
a.
remain in equilibrium, unaffected by the price floor.
b.
experience a shortage.
c.
experience a surplus.
d.
adjust its equilibrium point toward the price floor.
7.
If a tax is imposed on buyers of a good, the ________ curve of the good will shift ________ by the amount of the tax.
a.
demand, upward
b.
demand, downward
c.
supply, upward
d.
supply, downward
8.
If a tax is imposed on sellers of a good, the ________ curve of the good will shift ________ by the amount of the tax.
a.
demand, upward
b.
demand, downward
c.
supply, upward
d.
supply, downward
9.
If a tax is imposed on a good and the incidence of the tax ends up falling more heavily on the sellers than on the buyers, this will be because:
a.
demand is more elastic than supply for that good.
b.
demand is less elastic than supply for that good.
c.
the tax was imposed on the buyers of the good.
d.
the tax was imposed on the sellers of the good.
10.
If a tax is imposed on a good and the incidence of the tax ends up falling more heavily on the buyers than on the sellers, this will be because:
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