Question 1

One consequence of rent ceilings set below the equilibrium rent is that

Accepted Answer

A)  a surplus of housing units develops. 
B)  renters are no longer exploited by landlords. 
C)  it makes the long-run housing supply more elastic. 
D)  search costs for housing increase. 
A)  a surplus of housing units develops. 
B)  renters are no longer exploited by landlords. 
C)  it makes the long-run housing supply more elastic. 
D)  search costs for housing increase.

Question 2

-The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. The amount of the tax paid by the buyers would be greater than shown in the figure

Accepted Answer

A)  only if the demand was more elastic. 
B)  only if the demand was more inelastic. 
C)  only if the supply was more elastic. 
D)  if either the demand was more inelastic or the supply more elastic. 
A)  only if the demand was more elastic. 
B)  only if the demand was more inelastic. 
C)  only if the supply was more elastic. 
D)  if either the demand was more inelastic or the supply more elastic.

Question 3

-To help pay for the cost of sport related injuries, the government imposes a tax on sellers of all sports equipment. Using the above figure, how much deadweight loss results from this tax on sports equipment?

Accepted Answer

A)  cbd 
B)  ced 
C)  abd 
D)  acd 
A)  cbd 
B)  ced 
C)  abd 
D)  acd

Question 4

-The figure above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $6 per hour, how many hours of students' labor are unemployed?

Accepted Answer

A)  12,000 hours 
B)  9,000 hours 
C)  6,000 hours 
D)  0 hours 
A)  12,000 hours 
B)  9,000 hours 
C)  6,000 hours 
D)  0 hours

Question 5

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

Accepted Answer

A)  the corn market will be efficient 
B)  a deadweight loss will be created 
C)  a shortage of corn will be created 
D)  None of the above answers is correct 
A)  the corn market will be efficient 
B)  a deadweight loss will be created 
C)  a shortage of corn will be created 
D)  None of the above answers is correct

Question 6

-The government raises the sales tax on shirts. The tax is imposed on sellers. As a result, the ________.

Accepted Answer

A)  supply curve of shirts shifts leftward 
B)  supply curve of shirts shifts rightward 
C)  demand curve for shirts becomes vertical 
D)  demand curve for shirts becomes horizontal 
A)  supply curve of shirts shifts leftward 
B)  supply curve of shirts shifts rightward 
C)  demand curve for shirts becomes vertical 
D)  demand curve for shirts becomes horizontal

Question 7

-In the above figure, if the minimum wage is set at $2 per hour, what quantity of labor is employed?

Accepted Answer

A)  100 million hours 
B)  200 million hours 
C)  300 million hours 
D)  400 million hours 
A)  100 million hours 
B)  200 million hours 
C)  300 million hours 
D)  400 million hours

Question 8

-In the above figure, the price received by the seller before the tax is ________ per compact disc, and the price received and kept by the seller after the tax is ________ per compact disc.

Accepted Answer

A)  $20; $20 
B)  $20; $10 
C)  $30; $20 
D)  $30; $10 
A)  $20; $20 
B)  $20; $10 
C)  $30; $20 
D)  $30; $10

Question 9

-A price floor is a price

Accepted Answer

A)  below which a seller cannot legally sell. 
B)  above which a seller cannot legally sell. 
C)  that creates a surplus of the good if it is set above the equilibrium price. 
D)  Both answers A and C are correct. 
A)  below which a seller cannot legally sell. 
B)  above which a seller cannot legally sell. 
C)  that creates a surplus of the good if it is set above the equilibrium price. 
D)  Both answers A and C are correct.

Question 10

-In the above figure, a sales tax of $1 per unit imposed on sellers ________ the price buyers pay and ________ the price that suppliers keep for themselves.

Accepted Answer

A)  affects; does not affect 
B)  does not affect; affects 
C)  does not affect; does not affect 
D)  affects; affects 
A)  affects; does not affect 
B)  does not affect; affects 
C)  does not affect; does not affect 
D)  affects; affects

Question 11

One positive aspect of rent ceilings is that they help reduce the time and expense associated with apartment hunting.

Accepted Answer

A) True 
 B)False

Question 12

-The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. Using the figure, what is the tax per blouse?

Accepted Answer

A)  $10 per blouse 
B)  $20 per blouse 
C)  $30 per blouse 
D)  $40 per blouse 
A)  $10 per blouse 
B)  $20 per blouse 
C)  $30 per blouse 
D)  $40 per blouse

Question 13

-The above figure shows the demand and supply curves for housing As a result of a rent ceiling at $500, the deadweight loss is represented by the area

Accepted Answer

A)  rectangle feag. 
B)  triangle gfe. 
C)  triangle eca. 
D)  triangle acb. 
A)  rectangle feag. 
B)  triangle gfe. 
C)  triangle eca. 
D)  triangle acb.

Question 14

-You are in the business of producing and selling hamburgers, french fries, pizza, and ice cream. The mayor plans to impose a tax on one of these products. Based on the elasticities in the above table, as a profit-minded business person who seeks to avoid taxes whenever possible, which good would you least like to have taxed?

Accepted Answer

A)  hamburgers 
B)  pizza 
C)  French fries 
D)  ice cream 
A)  hamburgers 
B)  pizza 
C)  French fries 
D)  ice cream

Question 15

What is a black market and how does it influence the market for rental housing if a rent ceiling creates a housing shortage? What determines the level of the black market rent?

Accepted Answer

A black market is an illegal market in w

Question 16

Suppose the government imposes a price ceiling that is lower than the equilibrium price. Discuss the effect, if any, on the price and quantity if the government later removes the price ceiling.

Accepted Answer

If the price ceiling is lower than the e

Question 17

-The figure shows the market for rental units in Gladstone. The market is in equilibrium. The government now introduces a rent ceiling of $500 a month. The price of a rental unit ________ and the number of units rented ________.

Accepted Answer

A)  increases by $500 per month; decreases 
B)  increases by $100 per month; increases 
C)  decreases by $100 per month; decreases 
D)  remains the same; remains the same 
A)  increases by $500 per month; decreases 
B)  increases by $100 per month; increases 
C)  decreases by $100 per month; decreases 
D)  remains the same; remains the same

Question 18

A rent ceiling set above the equilibrium rent has no effect.

Accepted Answer

A) True 
 B)False

Question 19

After a $3 per-unit tax on seeing movies in theaters is imposed, attendance falls from 4,000 a week to 3,000 a week. The revenue from the tax is

Accepted Answer

A)  less than $9,000 a week. 
B)  $9,000 a week. 
C)  between $9,000 a week and $12,000 a week. 
D)  some amount that cannot be calculated without more information. 
A)  less than $9,000 a week. 
B)  $9,000 a week. 
C)  between $9,000 a week and $12,000 a week. 
D)  some amount that cannot be calculated without more information.

Question 20

-In the above figure, the amount of tax revenue is

Accepted Answer

A)  $2,000. 
B)  $4,000. 
C)  $6,000. 
D)  $8,000. 
A)  $2,000. 
B)  $4,000. 
C)  $6,000. 
D)  $8,000.

Exam 6: Government Actions in Markets

One consequence of rent ceilings set below the equilibrium rent is that

-The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. The amount of the tax paid by the buyers would be greater than shown in the figure

-To help pay for the cost of sport related injuries, the government imposes a tax on sellers of all sports equipment. Using the above figure, how much deadweight loss results from this tax on sports equipment?

-The figure above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $6 per hour, how many hours of students' labor are unemployed?

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

-The government raises the sales tax on shirts. The tax is imposed on sellers. As a result, the ________.

-In the above figure, if the minimum wage is set at $2 per hour, what quantity of labor is employed?

-In the above figure, the price received by the seller before the tax is ________ per compact disc, and the price received and kept by the seller after the tax is ________ per compact disc.

-A price floor is a price

-In the above figure, a sales tax of $1 per unit imposed on sellers ________ the price buyers pay and ________ the price that suppliers keep for themselves.

One positive aspect of rent ceilings is that they help reduce the time and expense associated with apartment hunting.

-The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. Using the figure, what is the tax per blouse?

-The above figure shows the demand and supply curves for housing As a result of a rent ceiling at $500, the deadweight loss is represented by the area

What is a black market and how does it influence the market for rental housing if a rent ceiling creates a housing shortage? What determines the level of the black market rent?

Suppose the government imposes a price ceiling that is lower than the equilibrium price. Discuss the effect, if any, on the price and quantity if the government later removes the price ceiling.

-The figure shows the market for rental units in Gladstone. The market is in equilibrium. The government now introduces a rent ceiling of $500 a month. The price of a rental unit ________ and the number of units rented ________.

A rent ceiling set above the equilibrium rent has no effect.

After a $3 per-unit tax on seeing movies in theaters is imposed, attendance falls from 4,000 a week to 3,000 a week. The revenue from the tax is

-In the above figure, the amount of tax revenue is

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

-In the above figure, the price received by the seller before the tax is per compact disc, and the price received and kept by the seller after the tax is per compact disc.

-In the above figure, a sales tax of $1 per unit imposed on sellers the price buyers pay and the price that suppliers keep for themselves.

-The figure shows the market for rental units in Gladstone. The market is in equilibrium. The government now introduces a rent ceiling of $500 a month. The price of a rental unit and the number of units rented .