Question 1

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 2

Use the table below to answer the following questions.
Table 6.2.2
  
-Refer to Table 6.2.2.What is the equilibrium wage rate in an unregulated market?

Accepted Answer

A) $5.00 per hour 
B) $5.50 per hour 
C) $6.00 per hour 
D) $6.50 per hour 
E) $7.50 per hour 
A) $5.00 per hour 
B) $5.50 per hour 
C) $6.00 per hour 
D) $6.50 per hour 
E) $7.50 per hour

Question 3

Use the table below to answer the following question.
Table 6.4.1
  
-Refer to Table 6.4.1.The table shows the demand and supply schedules for rice.The market for rice is in equilibrium.With a subsidy of $0.30 a box,the price of a box of rice is ________,the marginal cost of producing rice is ________ a box,and the quantity of rice produced is ________ boxes.

Accepted Answer

A) $1.40;$1.40;2,500 
B) $1.20;$1.50;2,500 
C) $1.20;$1.50;3,000 
D) $1.50;$1.20;3,000 
E) $1.50;$1.20;2,500 
A) $1.40;$1.40;2,500 
B) $1.20;$1.50;2,500 
C) $1.20;$1.50;3,000 
D) $1.50;$1.20;3,000 
E) $1.50;$1.20;2,500

Question 4

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) None of the above.Neither the demand curve nor the supply curve shift. 
A) rightward;rightward 
B) leftward;leftward 
C) rightward;leftward 
D) leftward;rightward 
E) None of the above.Neither the demand curve nor the supply curve shift.

Question 5

Use the table below to answer the following questions.
Table 6.2.2
  
-Refer to Table 6.2.2.What is the level of unemployment in millions of hours if the minimum wage is set at $3 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 6

Use the figure below to answer the following questions.
   
Figure 6.3.3
-Refer to Figure 6.3.3.Suppose a tax of $1 is imposed.In which market would tax revenue be the lowest?

Accepted Answer

A) (a) 
B) (b) 
C) (c) 
D) (d) 
E) all markets equally 
A) (a) 
B) (b) 
C) (c) 
D) (d) 
E) all markets equally

Question 7

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) all of the above. 
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) all of the above.

Question 8

Use the table below to answer the following questions.
Table 6.2.1
  
-Table 6.2.1 gives the supply and demand schedules for teenage labour in Genoa City.Suppose the Genoa City Council sets a minimum wage of $6 per hour.Teenage unemployment is

Accepted Answer

A) 800 hours. 
B) 600 hours. 
C) 400 hours. 
D) 200 hours. 
E) zero hours. 
A) 800 hours. 
B) 600 hours. 
C) 400 hours. 
D) 200 hours. 
E) zero hours.

Question 9

Use the figure below to answer the following questions.
   
Figure 6.2.1
-Refer to Figure 6.2.1.If the minimum wage is set at $6 per hour,what is the level of unemployment in millions of hours?

Accepted Answer

A) 50 
B) 40 
C) 20 
D) 10 
E) 0 
A) 50 
B) 40 
C) 20 
D) 10 
E) 0

Question 10

If a sales tax is imposed on food,who is likely to pay most of the tax?

Accepted Answer

A) mostly the buyer 
B) mostly the seller 
C) neither the seller nor the buyer 
D) the buyer and the seller equally 
E) the burden of the tax depends on the size of the tax 
A) mostly the buyer 
B) mostly the seller 
C) neither the seller nor the buyer 
D) the buyer and the seller equally 
E) the burden of the tax depends on the size of the tax

Question 11

If the demand for a good is perfectly inelastic,then a tax on the good will be paid

Accepted Answer

A) completely by the buyers. 
B) completely by the sellers. 
C) equally by the buyers and sellers. 
D) mostly but not completely by the buyers. 
E) mostly but not completely by the sellers. 
A) completely by the buyers. 
B) completely by the sellers. 
C) equally by the buyers and sellers. 
D) mostly but not completely by the buyers. 
E) mostly but not completely by the sellers.

Question 12

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 sellers,the price received by sellers (net of the cost of breaking the law)would be

Accepted Answer

A) $8. 
B) $7. 
C) $9. 
D) $10. 
E) $6. 
A) $8. 
B) $7. 
C) $9. 
D) $10. 
E) $6.

Question 13

Use the figure below to answer the following questions.
   
Figure 6.3.3
-Refer to Figure 6.3.3.Suppose a tax of $1 is imposed.In which market would the buyer pay the highest portion of the tax?

Accepted Answer

A) (a) 
B) (b) 
C) (c) 
D) (d) 
E) all markets equally 
A) (a) 
B) (b) 
C) (c) 
D) (d) 
E) all markets equally

Question 14

Use the figure below to answer the following questions.
   
Figure 6.1.1
-Refer to Figure 6.1.1.If the demand for rental housing increases and the demand curve shifts rightward from D? to D?,and the market is unregulated,the number of rooms rented is

Accepted Answer

A) 1,500, and the rent rises to $200 a month. 
B) 2,000, and the rent is at its initial level. 
C) 1,750, and the rent rises to $175 a month. 
D) 2,000, and the rent rises to $200 a month. 
E) 1,750, and the rent rises to $200 a month. 
A) 1,500, and the rent rises to $200 a month. 
B) 2,000, and the rent is at its initial level. 
C) 1,750, and the rent rises to $175 a month. 
D) 2,000, and the rent rises to $200 a month. 
E) 1,750, and the rent rises to $200 a month.

Question 15

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 16

In an unregulated housing market,with no rent ceiling,

Accepted Answer

A) marginal social cost is greater than marginal social benefit. 
B) marginal social benefit is greater than marginal social cost. 
C) marginal social benefit equals marginal social cost. 
D) marginal social benefit is negative. 
E) marginal social cost is negative. 
A) marginal social cost is greater than marginal social benefit. 
B) marginal social benefit is greater than marginal social cost. 
C) marginal social benefit equals marginal social cost. 
D) marginal social benefit is negative. 
E) marginal social cost is negative.

Question 17

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 buyers' share of the tax is

Accepted Answer

A) $2.00. 
B) $1.50. 
C) $1.00. 
D) zero. 
E) $2.50. 
A) $2.00. 
B) $1.50. 
C) $1.00. 
D) zero. 
E) $2.50.

Question 18

Suppose the equilibrium wage is $10 an hour.A minimum wage is a price ________ and 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 19

Complete the following sentence.A price floor set below the equilibrium price results in

Accepted Answer

A) a surplus. 
B) a shortage. 
C) the equilibrium price. 
D) an increase in supply. 
E) a decrease in demand. 
A) a surplus. 
B) a shortage. 
C) the equilibrium price. 
D) an increase in supply. 
E) a decrease in demand.

Question 20

An effective rent ceiling

Accepted Answer

A) increases consumer surplus. 
B) increases producer surplus. 
C) creates a deadweight loss. 
D) decreases the supply of housing. 
E) increases the supply of housing. 
A) increases consumer surplus. 
B) increases producer surplus. 
C) creates a deadweight loss. 
D) decreases the supply of housing. 
E) increases the supply of housing.

Exam 6: Government Actions in Markets

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

Use the table below to answer the following questions. Table 6.2.2 -Refer to Table 6.2.2.What is the equilibrium wage rate in an unregulated market?

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 table below to answer the following questions. Table 6.2.2 -Refer to Table 6.2.2.What is the level of unemployment in millions of hours if the minimum wage is set at $3 per hour?

Use the figure below to answer the following questions. Figure 6.3.3 -Refer to Figure 6.3.3.Suppose a tax of $1 is imposed.In which market would tax revenue be the lowest?

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

Use the table below to answer the following questions. Table 6.2.1 -Table 6.2.1 gives the supply and demand schedules for teenage labour in Genoa City.Suppose the Genoa City Council sets a minimum wage of $6 per hour.Teenage unemployment is

Use the figure below to answer the following questions. Figure 6.2.1 -Refer to Figure 6.2.1.If the minimum wage is set at $6 per hour,what is the level of unemployment in millions of hours?

If a sales tax is imposed on food,who is likely to pay most of the tax?

If the demand for a good is perfectly inelastic,then a tax on the good will be paid

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 sellers,the price received by sellers (net of the cost of breaking the law)would be

Use the figure below to answer the following questions. Figure 6.3.3 -Refer to Figure 6.3.3.Suppose a tax of $1 is imposed.In which market would the buyer pay the highest portion of the tax?

Use the figure below to answer the following questions. Figure 6.1.1 -Refer to Figure 6.1.1.If the demand for rental housing increases and the demand curve shifts rightward from D? to D?,and the market is unregulated,the number of rooms rented is

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

In an unregulated housing market,with no rent ceiling,

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 buyers' share of the tax is

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

Complete the following sentence.A price floor set below the equilibrium price results in

An effective rent ceiling

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

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: The Keynesian Model

Canadian Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

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 .

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