<p> Mankiw Chapter 6 Exam Review</p><p>MULTIPLE CHOICE</p><p>1. In a competitive market free of government regulation…</p><p>2. Policymakers use taxes for…</p><p>3. The presence of a price control in a market for a good or service usually is an indication that…</p><p>4. Minimum-wage laws dictate…</p><p>5. Rent-control laws dictate…</p><p>Figure 6-8</p><p> price of gasoline S2</p><p>P3 S1</p><p>P2 price ceiling</p><p>P1</p><p>D Q3 Q1 quantity of gasoline</p><p>6. Refer to Figure 6-8. When the price ceiling applies in this market and the supply curve for gasoline </p><p> shifts from S2 to S1…</p><p>7. Refer to Figure 6-8. When the price ceiling applies in this market and the supply curve for gasoline </p><p> shifts from S1 to S2, the resulting quantity of gasoline that is bought and sold is…</p><p>8. Refer to Figure 6-8. Which of the following statements best relates the figure to the events that occurred in the United States in the 1970s…</p><p>Figure 6-4 price 10 S 9</p><p>8</p><p>7</p><p>6</p><p>5</p><p>4</p><p>3 D 2</p><p>1</p><p>10 20 30 40 50 60 70 80 quantity</p><p>9. Refer to Figure 6-4. For a price ceiling to be binding in this market, it would have to be set at…</p><p>10. Refer to Figure 6-4. For a price floor to be binding in this market, it would have to be set at…</p><p>11. Refer to Figure 6-4. Which of the following price controls would cause a shortage of twenty units of the good?</p><p>12. Refer to Figure 6-4. Which of the following price controls would cause a surplus of twenty units of the good?</p><p>13. Refer to Figure 6-4. Suppose a price ceiling of $5 is imposed on this market. As a result…</p><p>14. Refer to Figure 6-4. Suppose a price floor of $7 is imposed on this market. As a result…</p><p>15. Which of the following is the most likely explanation for the imposition of a price ceiling on the market for milk?</p><p>16. If a price ceiling is not binding, then…</p><p>17. If a nonbinding price ceiling is imposed on a market, then…</p><p>18. A price ceiling is binding when it is set…</p><p>19. If a price ceiling is a binding constraint on a market, then…</p><p>20. Suppose the government has imposed a price ceiling on televisions. Which of the following events could transform the price ceiling from one that is not binding into one that is binding?</p><p>21. If the government removes a binding price ceiling from a market, then the price paid by buyers will…</p><p>22. In response to a shortage caused by the imposition of a binding price ceiling on a market…</p><p>24. In a free, competitive market, what is the rationing mechanism?</p><p>25. Rent control does what?</p><p>26. Which of the following statements about the effects of rent control is correct? 27. One economist has argued that rent control is "the best way to destroy a city, other than bombing." Why would an economist say this?</p><p>28. Under rent control, tenants can expect…</p><p>29. A legal minimum on the price at which a good can be sold is called a price ______.</p><p>30. A price floor is…</p><p>31. If a price floor is not binding, then…</p><p>32. A price floor is binding when it is set…</p><p>35. If the minimum wage exceeds the equilibrium wage, then…</p><p>36. A minimum wage that is set above a market's equilibrium wage will result in…</p><p>37. A minimum wage that is set below a market's equilibrium wage will result in…</p><p>39. Price ceilings and price floors that are binding</p><p>Table 6-1</p><p>Price Quantity Quantity Demanded Supplied $0 12 0 $1 10 2 $2 8 4 $3 6 6 $4 4 8 $5 2 10 $6 0 12</p><p>40. Refer to Table 6-1. Which of the following price ceilings would be binding in this market?</p><p>41. Refer to Table 6-1. Which of the following price floors would be binding in this market?</p><p>42. Refer to Table 6-1. Suppose the government imposes a price ceiling of $1 on this market. What will be the size of the shortage in this market?</p><p>43. Refer to Table 6-1. Suppose the government imposes a price ceiling of $5 on this market. What will be the size of the shortage in this market?</p><p>44. Refer to Table 6-1. Suppose the government imposes a price floor of $1 on this market. What will be the size of the surplus in this market?</p><p>45. Refer to Table 6-1. Suppose the government imposes a price floor of $5 on this market. What will be the size of the surplus in this market?</p><p>Figure 6-12 price S after tax 9</p><p>8</p><p>7 S 6</p><p>5</p><p>4</p><p>3</p><p>2 D 1</p><p>2 4 6 8 10 12 14 16 quantity</p><p>46. Refer to Figure 6-12. The price paid by buyers after the tax is imposed is ______.</p><p>47. Refer to Figure 6-12. The effective price received by sellers after the tax is imposed is ______.</p><p>50. Refer to Figure 6-12. How much tax revenue does this tax produce for the government? _____.</p>