Question 1

The time spent looking for someone with whom to do business is called

Accepted Answer

A) elasticity of time. 
B) market time. 
C) search activity. 
D) opportunity time. 
E) development time. 
A) elasticity of time. 
B) market time. 
C) search activity. 
D) opportunity time. 
E) development time.

Question 2

Governments tend to tax items with inelastic demand because

Accepted Answer

A) governments wish to avoid big rises in after-tax prices. 
B) sellers pay most of the tax in these cases. 
C) buyers pay most of the tax in these cases. 
D) these goods yield the most tax revenues. 
E) these goods are luxury goods. 
A) governments wish to avoid big rises in after-tax prices. 
B) sellers pay most of the tax in these cases. 
C) buyers pay most of the tax in these cases. 
D) these goods yield the most tax revenues. 
E) these goods are luxury goods.

Question 3

A subsidy is a

Accepted Answer

A) tax imposed by the government on imported goods. 
B) payment made by the government to a producer. 
C) tax imposed by the government on a producer. 
D) payment made by a consumer to a producer. 
E) payment made by foreign governments to domestic farmers. 
A) tax imposed by the government on imported goods. 
B) payment made by the government to a producer. 
C) tax imposed by the government on a producer. 
D) payment made by a consumer to a producer. 
E) payment made by foreign governments to domestic farmers.

Question 4

A production quota is set below the equilibrium quantity.At the quota quantity,marginal social benefit is ________ marginal social cost and the level of production is ________.

Accepted Answer

A) less than;efficient 
B) greater than;efficient 
C) less than;inefficient 
D) greater than;inefficient 
E) equal to;efficient 
A) less than;efficient 
B) greater than;efficient 
C) less than;inefficient 
D) greater than;inefficient 
E) equal to;efficient

Question 5

Use the table below to answer the following questions.
Table 6.1.1
  
-Refer to Table 6.1.1,which gives the demand schedule and the supply schedule for the apartment market in Anytown,Alberta.If a rent ceiling of $600 is imposed in the apartment market,then

Accepted Answer

A) there is a shortage of 80 apartments. 
B) there is a surplus of 80 apartments. 
C) the supply of apartments will increase. 
D) the supply of apartments will decrease. 
E) the quantity of apartments supplied is 60 units. 
A) there is a shortage of 80 apartments. 
B) there is a surplus of 80 apartments. 
C) the supply of apartments will increase. 
D) the supply of apartments will decrease. 
E) the quantity of apartments supplied is 60 units.

Question 6

Use the table below to answer the following questions.
Table 6.5.1
The Market for a Prohibited Good  
-Refer to Table 6.5.1.If a $2-per-unit cost of breaking the law is imposed on both the buyers and the sellers,the new price is ________ and the new equilibrium quantity is ________ units.

Accepted Answer

A) $8;400 
B) $8;300 
C) $7;300 
D) $9;300 
E) $8;200 
A) $8;400 
B) $8;300 
C) $7;300 
D) $9;300 
E) $8;200

Question 7

Use the figure below to answer the following questions.   Figure 6.3.2
-Refer to Figure 6.3.2.The deadweight loss from the sales tax is

Accepted Answer

A) $50. 
B) $100. 
C) $200. 
D) $1,000. 
E) $150. 
A) $50. 
B) $100. 
C) $200. 
D) $1,000. 
E) $150.

Question 8

Use the table below to answer the following questions.
Table 6.3.1  
-Refer to Table 6.3.1.Suppose a sales tax of $2 a unit is imposed on the good described in the table.The new price paid by consumers is $ ________ and ________ units are sold.

Accepted Answer

A) $6;400 
B) $7;700 
C) $7;500 
D) $6.50;500 
E) $6.50;700 
A) $6;400 
B) $7;700 
C) $7;500 
D) $6.50;500 
E) $6.50;700

Question 9

When a minimum wage is set above the equilibrium wage rate,

Accepted Answer

A) unemployment decreases. 
B) job search activity decreases. 
C) the supply of workers decreases. 
D) unemployment increases. 
E) the supply of workers increases. 
A) unemployment decreases. 
B) job search activity decreases. 
C) the supply of workers decreases. 
D) unemployment increases. 
E) the supply of workers increases.

Question 10

The government sets a price floor for corn,which is above the equilibrium price of corn.As a result

Accepted Answer

A) the market for corn is efficient. 
B) a shortage of corn occurs. 
C) consumer surplus is maximized. 
D) a deadweight loss is created. 
E) the sum of consumer surplus and producer surplus is maximized. 
A) the market for corn is efficient. 
B) a shortage of corn occurs. 
C) consumer surplus is maximized. 
D) a deadweight loss is created. 
E) the sum of consumer surplus and producer surplus is maximized.

Question 11

Use the table below to answer the following questions.
Table 6.3.2
  
-Refer to Table 6.3.2.You are in the business of producing and selling hamburgers,French fries,pizza,and ice cream.The mayor of your city plans to impose a sales tax on one of these products.Based on the elasticities in the table,on which of these goods would your customers least like to be taxed?

Accepted Answer

A) hamburgers 
B) French fries 
C) pizza 
D) ice cream 
E) Your customers are indifferent about which good is taxed. 
A) hamburgers 
B) French fries 
C) pizza 
D) ice cream 
E) Your customers are indifferent about which good is taxed.

Question 12

Use the table below to answer the following questions.
Table 6.2.2  
-Table 6.2.2 gives the labour demand and labour supply schedules for low-skilled labour.What is the level of unemployment in millions of hours if the minimum wage is set at $13 per hour?

Accepted Answer

A) 70 
B) 40 
C) 30 
D) 20 
E) zero 
A) 70 
B) 40 
C) 30 
D) 20 
E) zero

Question 13

Suppose the equilibrium wage is $10 an hour.A minimum wage is a price ________ that will change the quantity of employment if it is set at ________ an hour.

Accepted Answer

A) floor;$12 
B) ceiling;$12 
C) floor;$8 
D) ceiling;$8 
E) floor;$10 
A) floor;$12 
B) ceiling;$12 
C) floor;$8 
D) ceiling;$8 
E) floor;$10

Question 14

Suppose that buying and selling a certain good is made illegal.In the market for this good,the demand curve shifts ________ and the supply curve shifts ________.

Accepted Answer

A) rightward;rightward 
B) leftward;leftward 
C) rightward;leftward 
D) leftward;rightward 
E) neither leftward nor rightward;neither leftward nor rightward 
A) rightward;rightward 
B) leftward;leftward 
C) rightward;leftward 
D) leftward;rightward 
E) neither leftward nor rightward;neither leftward nor rightward

Question 15

Use the figure below to answer the following questions.   Figure 6.3.1
-Refer to Figure 6.3.1 showing the market for frisbees before and after a tax is imposed.On each frisbee,the buyers' share of the tax is

Accepted Answer

A) $0.40. 
B) $0.60. 
C) $1.00. 
D) $5.60. 
E) $6.60. 
A) $0.40. 
B) $0.60. 
C) $1.00. 
D) $5.60. 
E) $6.60.

Question 16

Suppose your province raises the provincial sales tax by 1 percent.You predict that the prices of taxed goods (including the tax)will

Accepted Answer

A) rise by 1 percent. 
B) rise by more than 1 percent. 
C) rise by an amount between zero and 1 percent. 
D) not change at all. 
E) fall by an amount between zero and 1 percent. 
A) rise by 1 percent. 
B) rise by more than 1 percent. 
C) rise by an amount between zero and 1 percent. 
D) not change at all. 
E) fall by an amount between zero and 1 percent.

Question 17

When rent is not permitted to allocate scarce rental housing,what other mechanisms are available?

Accepted Answer

A) a lottery 
B) first-come,first-served 
C) discrimination 
D) both A and B are correct 
E) A,B and C are correct 
A) a lottery 
B) first-come,first-served 
C) discrimination 
D) both A and B are correct 
E) A,B and C are correct

Question 18

Suppose the Canadian Dairy Commission sets a production quota for dairy production above the equilibrium quantity.Then,

Accepted Answer

A) the quantity of milk produced in Canada increases. 
B) the price of milk rises. 
C) the policy has no impact on the dairy industry. 
D) revenue received by dairy producers increases. 
E) revenue received by dairy producers decreases. 
A) the quantity of milk produced in Canada increases. 
B) the price of milk rises. 
C) the policy has no impact on the dairy industry. 
D) revenue received by dairy producers increases. 
E) revenue received by dairy producers decreases.

Question 19

If enforcement is aimed at buyers of an illegal good,the

Accepted Answer

A) price and quantity bought decrease. 
B) price and quantity bought increase. 
C) price rises and quantity bought decreases. 
D) price falls and quantity bought increases. 
E) price change is uncertain and quantity bought decreases. 
A) price and quantity bought decrease. 
B) price and quantity bought increase. 
C) price rises and quantity bought decreases. 
D) price falls and quantity bought increases. 
E) price change is uncertain and quantity bought decreases.

Question 20

A fact that argues in favour of prohibition and against taxes on illegal drugs is that

Accepted Answer

A) prohibition sends a signal that might influence preferences. 
B) penalties for illegal activities with prohibition are less than the penalties for tax evasion. 
C) a black market is easier to maintain under prohibition than under the tax code. 
D) search activity decreases with prohibition. 
E) prohibition raises more government income. 
A) prohibition sends a signal that might influence preferences. 
B) penalties for illegal activities with prohibition are less than the penalties for tax evasion. 
C) a black market is easier to maintain under prohibition than under the tax code. 
D) search activity decreases with prohibition. 
E) prohibition raises more government income.

The time spent looking for someone with whom to do business is called

Governments tend to tax items with inelastic demand because

A subsidy is a

A production quota is set below the equilibrium quantity.At the quota quantity,marginal social benefit is marginal social cost and the level of production is .

Use the table below to answer the following questions. Table 6.1.1 -Refer to Table 6.1.1,which gives the demand schedule and the supply schedule for the apartment market in Anytown,Alberta.If a rent ceiling of $600 is imposed in the apartment market,then

Use the table below to answer the following questions. Table 6.5.1 The Market for a Prohibited Good -Refer to Table 6.5.1.If a $2-per-unit cost of breaking the law is imposed on both the buyers and the sellers,the new price is and the new equilibrium quantity is units.

Use the figure below to answer the following questions. Figure 6.3.2 -Refer to Figure 6.3.2.The deadweight loss from the sales tax is

Use the table below to answer the following questions. Table 6.3.1 -Refer to Table 6.3.1.Suppose a sales tax of $2 a unit is imposed on the good described in the table.The new price paid by consumers is $ and units are sold.

When a minimum wage is set above the equilibrium wage rate,

The government sets a price floor for corn,which is above the equilibrium price of corn.As a result

Use the table below to answer the following questions. Table 6.2.2 -Table 6.2.2 gives the labour demand and labour supply schedules for low-skilled labour.What is the level of unemployment in millions of hours if the minimum wage is set at $13 per hour?

Suppose the equilibrium wage is $10 an hour.A minimum wage is a price that will change the quantity of employment if it is set at an hour.

Suppose that buying and selling a certain good is made illegal.In the market for this good,the demand curve shifts and the supply curve shifts .

Use the figure below to answer the following questions. Figure 6.3.1 -Refer to Figure 6.3.1 showing the market for frisbees before and after a tax is imposed.On each frisbee,the buyers' share of the tax is

Suppose your province raises the provincial sales tax by 1 percent.You predict that the prices of taxed goods (including the tax)will

When rent is not permitted to allocate scarce rental housing,what other mechanisms are available?

Suppose the Canadian Dairy Commission sets a production quota for dairy production above the equilibrium quantity.Then,

If enforcement is aimed at buyers of an illegal good,the

A fact that argues in favour of prohibition and against taxes on illegal drugs is that

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

Exam 6: Government Actions in Markets

The time spent looking for someone with whom to do business is called

Governments tend to tax items with inelastic demand because

A subsidy is a

A production quota is set below the equilibrium quantity.At the quota quantity,marginal social benefit is ________ marginal social cost and the level of production is ________.

Use the table below to answer the following questions. Table 6.1.1 -Refer to Table 6.1.1,which gives the demand schedule and the supply schedule for the apartment market in Anytown,Alberta.If a rent ceiling of $600 is imposed in the apartment market,then

Use the table below to answer the following questions. Table 6.5.1 The Market for a Prohibited Good -Refer to Table 6.5.1.If a $2-per-unit cost of breaking the law is imposed on both the buyers and the sellers,the new price is ________ and the new equilibrium quantity is ________ units.

Use the figure below to answer the following questions. Figure 6.3.2 -Refer to Figure 6.3.2.The deadweight loss from the sales tax is

Use the table below to answer the following questions. Table 6.3.1 -Refer to Table 6.3.1.Suppose a sales tax of $2 a unit is imposed on the good described in the table.The new price paid by consumers is $ ________ and ________ units are sold.

When a minimum wage is set above the equilibrium wage rate,

The government sets a price floor for corn,which is above the equilibrium price of corn.As a result

Use the table below to answer the following questions. Table 6.2.2 -Table 6.2.2 gives the labour demand and labour supply schedules for low-skilled labour.What is the level of unemployment in millions of hours if the minimum wage is set at $13 per hour?

Suppose the equilibrium wage is $10 an hour.A minimum wage is a price ________ that will change the quantity of employment if it is set at ________ an hour.

Suppose that buying and selling a certain good is made illegal.In the market for this good,the demand curve shifts ________ and the supply curve shifts ________.

Use the figure below to answer the following questions. Figure 6.3.1 -Refer to Figure 6.3.1 showing the market for frisbees before and after a tax is imposed.On each frisbee,the buyers' share of the tax is

Suppose your province raises the provincial sales tax by 1 percent.You predict that the prices of taxed goods (including the tax)will

When rent is not permitted to allocate scarce rental housing,what other mechanisms are available?

Suppose the Canadian Dairy Commission sets a production quota for dairy production above the equilibrium quantity.Then,

If enforcement is aimed at buyers of an illegal good,the

A fact that argues in favour of prohibition and against taxes on illegal drugs is that

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Global Markets in Action

Utility and Demand

Possibilities, preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Filters

A production quota is set below the equilibrium quantity.At the quota quantity,marginal social benefit is marginal social cost and the level of production is .

Use the table below to answer the following questions. Table 6.5.1 The Market for a Prohibited Good -Refer to Table 6.5.1.If a $2-per-unit cost of breaking the law is imposed on both the buyers and the sellers,the new price is and the new equilibrium quantity is units.

Use the table below to answer the following questions. Table 6.3.1 -Refer to Table 6.3.1.Suppose a sales tax of $2 a unit is imposed on the good described in the table.The new price paid by consumers is $ and units are sold.

Suppose the equilibrium wage is $10 an hour.A minimum wage is a price that will change the quantity of employment if it is set at an hour.

Suppose that buying and selling a certain good is made illegal.In the market for this good,the demand curve shifts and the supply curve shifts .