Question 1

If penalties are imposed on the sellers of illegal goods or services, then the equilibrium price ________ and the equilibrium quantity ________.

Accepted Answer

A)  rises; increases 
B)  rises; decreases 
C)  falls; increases 
D)  falls; decreases 
A)  rises; increases 
B)  rises; decreases 
C)  falls; increases 
D)  falls; decreases

Question 2

One reason why soda companies are so fervently against this tax might be because they assume sellers will pay the entire tax. Sellers will pay the entire tax if

Accepted Answer

A)  supply is perfectly inelastic. 
B)  the price elasticity of supply is between zero and 1. 
C)  supply is unit elastic. 
D)  supply is perfectly elastic. 
A)  supply is perfectly inelastic. 
B)  the price elasticity of supply is between zero and 1. 
C)  supply is unit elastic. 
D)  supply is perfectly elastic.

Question 3

-In the figure above, imposing a tax on the product results in a division in which

Accepted Answer

A)  all of the tax is paid by the buyers. 
B)  all of the tax is paid by the sellers. 
C)  the buyers and sellers pay the same amount. 
D)  neither the buyers nor the sellers pay the tax. 
A)  all of the tax is paid by the buyers. 
B)  all of the tax is paid by the sellers. 
C)  the buyers and sellers pay the same amount. 
D)  neither the buyers nor the sellers pay the tax.

Question 4

-In the figure above, D0 is the demand for labor curve. Imposing a minimum wage of $3 per hour will

Accepted Answer

A)  have no effect on the market. 
B)  result in unemployment. 
C)  result in a labor shortage. 
D)  immediately shift the demand curve to D1. 
A)  have no effect on the market. 
B)  result in unemployment. 
C)  result in a labor shortage. 
D)  immediately shift the demand curve to D1.

Question 5

-The table above shows the demand for and supply of rental housing in Crainsboro. The city government is considering imposing a rent ceiling of $700 a month. Help the government to analyze the effects of the proposed rent ceiling.
a) Draw the demand and supply curves. With no rent ceiling, what is the rent and how many apartments are rented?
b) With the rent ceiling, what is the rent and how many apartments are rented? What is the shortage of housing? Explain.
c) If the rent ceiling is strictly enforced, what is the maximum price that someone is willing to pay for the last unit of housing available? Is the housing market efficient? Explain.
d) If a black market develops, how high could the black market rent be? Explain your answer.

Accepted Answer

@#IMG-DLM& a) The figure above shows the housing m

Question 6

-A minimum wage is a government-imposed price ________ that is designed to be ________ the equilibrium wage rate.

Accepted Answer

A)  ceiling; above 
B)  ceiling; below 
C)  floor; above 
D)  floor; below 
A)  ceiling; above 
B)  ceiling; below 
C)  floor; above 
D)  floor; below

Question 7

-The above table gives the demand schedule and the supply schedule for housing in Anytown, U.S.A. If a rent ceiling of $300 is imposed in the housing market, then

Accepted Answer

A)  there would be a surplus of apartments. 
B)  there would be a shortage of apartments. 
C)  the market would reach equilibrium at the quantity of 60 housing units. 
D)  the supply of housing would increase. 
A)  there would be a surplus of apartments. 
B)  there would be a shortage of apartments. 
C)  the market would reach equilibrium at the quantity of 60 housing units. 
D)  the supply of housing would increase.

Question 8

If demand for good is very inelastic and supply for the good is very elastic a sales tax imposed on sellers will cause the price received by sellers

Accepted Answer

A)  would not change very much. 
B)  would rise by more than the amount of the tax. 
C)  would fall by an amount of the tax. 
D)  would fall by more than the amount of the tax. 
A)  would not change very much. 
B)  would rise by more than the amount of the tax. 
C)  would fall by an amount of the tax. 
D)  would fall by more than the amount of the tax.

Question 9

When a government fines and/or imprisons convicted drug dealers, it is attempting to reduce the illegal drug trade by shifting the ________ curve for illegal drugs ________.

Accepted Answer

A)  demand; rightward 
B)  demand; leftward 
C)  supply; rightward 
D)  supply; leftward 
A)  demand; rightward 
B)  demand; leftward 
C)  supply; rightward 
D)  supply; leftward

Question 10

Will an increase in the minimum wage create more unemployment if the supply and demand for labor are highly elastic or highly inelastic?

Accepted Answer

An increase in the minimum wage creates

If penalties are imposed on the sellers of illegal goods or services, then the equilibrium price and the equilibrium quantity .

One reason why soda companies are so fervently against this tax might be because they assume sellers will pay the entire tax. Sellers will pay the entire tax if

-In the figure above, imposing a tax on the product results in a division in which

-In the figure above, D₀ is the demand for labor curve. Imposing a minimum wage of $3 per hour will

-A minimum wage is a government-imposed price that is designed to be the equilibrium wage rate.

-The above table gives the demand schedule and the supply schedule for housing in Anytown, U.S.A. If a rent ceiling of $300 is imposed in the housing market, then

If demand for good is very inelastic and supply for the good is very elastic a sales tax imposed on sellers will cause the price received by sellers

When a government fines and/or imprisons convicted drug dealers, it is attempting to reduce the illegal drug trade by shifting the curve for illegal drugs .

Will an increase in the minimum wage create more unemployment if the supply and demand for labor are highly elastic or highly inelastic?

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices and Public Goods

Externalities and the Environment

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Extension A: Review

Extension B: Review

Extension C: Review

Extension D: Review

Extension E: Review

Extension F: Review

Filters

Exam 6: Government Actions in Markets

If penalties are imposed on the sellers of illegal goods or services, then the equilibrium price ________ and the equilibrium quantity ________.

One reason why soda companies are so fervently against this tax might be because they assume sellers will pay the entire tax. Sellers will pay the entire tax if

-In the figure above, imposing a tax on the product results in a division in which

-In the figure above, D0 is the demand for labor curve. Imposing a minimum wage of $3 per hour will

-A minimum wage is a government-imposed price ________ that is designed to be ________ the equilibrium wage rate.

-The above table gives the demand schedule and the supply schedule for housing in Anytown, U.S.A. If a rent ceiling of $300 is imposed in the housing market, then

If demand for good is very inelastic and supply for the good is very elastic a sales tax imposed on sellers will cause the price received by sellers

When a government fines and/or imprisons convicted drug dealers, it is attempting to reduce the illegal drug trade by shifting the ________ curve for illegal drugs ________.

Will an increase in the minimum wage create more unemployment if the supply and demand for labor are highly elastic or highly inelastic?

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices and Public Goods

Externalities and the Environment

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Extension A: Review

Extension B: Review

Extension C: Review

Extension D: Review

Extension E: Review

Extension F: Review

Filters

If penalties are imposed on the sellers of illegal goods or services, then the equilibrium price and the equilibrium quantity .

-In the figure above, D₀ is the demand for labor curve. Imposing a minimum wage of $3 per hour will

-A minimum wage is a government-imposed price that is designed to be the equilibrium wage rate.

When a government fines and/or imprisons convicted drug dealers, it is attempting to reduce the illegal drug trade by shifting the curve for illegal drugs .