Question 1

Which one of the following is not likely to be an outcome of a rent ceiling?

Accepted Answer

A) a black market for rent-controlled housing 
B) long waiting lists of potential renters for rent-controlled housing 
C) a short-run shortage of housing 
D) a black market price below the rent ceiling 
E) increased search activity for rent-controlled housing 
A) a black market for rent-controlled housing 
B) long waiting lists of potential renters for rent-controlled housing 
C) a short-run shortage of housing 
D) a black market price below the rent ceiling 
E) increased search activity for rent-controlled housing

Question 2

First-come,first-served allocates housing to those

Accepted Answer

A) whose names are on waiting lists. 
B) who share similar views to the owner of the housing. 
C) who are rich. 
D) who are poor. 
E) who are lucky. 
A) whose names are on waiting lists. 
B) who share similar views to the owner of the housing. 
C) who are rich. 
D) who are poor. 
E) who are lucky.

Question 3

If the price of a good is not affected by a tax,then

Accepted Answer

A) supply is perfectly elastic. 
B) demand is perfectly elastic. 
C) the elasticity of supply is greater than elasticity of demand. 
D) demand is unit elastic. 
E) supply is unit elastic. 
A) supply is perfectly elastic. 
B) demand is perfectly elastic. 
C) the elasticity of supply is greater than elasticity of demand. 
D) demand is unit elastic. 
E) supply is unit elastic.

Question 4

Suppose the cost of breaking the law is imposed on the buyers of an illegal good.This action will have its biggest impact on quantity if the demand for the good is

Accepted Answer

A) inelastic or the supply is inelastic. 
B) elastic or the supply is elastic. 
C) elastic or the supply is inelastic. 
D) inelastic or the supply is elastic. 
E) perfectly inelastic. 
A) inelastic or the supply is inelastic. 
B) elastic or the supply is elastic. 
C) elastic or the supply is inelastic. 
D) inelastic or the supply is elastic. 
E) perfectly inelastic.

Question 5

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.Which one of the following costs of breaking the law imposed on the buyers of the good would reduce the quantity to zero?

Accepted Answer

A) $1 
B) $2 
C) $4 
D) $6 
E) $8 
A) $1 
B) $2 
C) $4 
D) $6 
E) $8

Question 6

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 there is a strictly enforced rent ceiling of $150 per room,

Accepted Answer

A) the number of rooms rented will increase to 2,000. 
B) the number of rooms rented is 1,500. 
C) there is a housing shortage of 500 rooms. 
D) both B and C. 
E) the number of rooms rented decreases to 1,000. 
A) the number of rooms rented will increase to 2,000. 
B) the number of rooms rented is 1,500. 
C) there is a housing shortage of 500 rooms. 
D) both B and C. 
E) the number of rooms rented decreases to 1,000.

Question 7

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.With a production quota of 2,000 boxes a week,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 a week.

Accepted Answer

A) $1.30;$1.60;2,000 
B) $1.60;$1.30;2,000 
C) $1.40;$1.40;2,500 
D) $1.40;$1.40;2,000 
E) $1.60;$1.30;2,500 
A) $1.30;$1.60;2,000 
B) $1.60;$1.30;2,000 
C) $1.40;$1.40;2,500 
D) $1.40;$1.40;2,000 
E) $1.60;$1.30;2,500

Question 8

Use the figure below to answer the following questions.
   
Figure 6.2.1
-Refer to Figure 6.2.1.Suppose a $5 per hour minimum wage is in force.What is the lowest wage per hour an unemployed person would be willing to accept?

Accepted Answer

A) $2 
B) $3 
C) $4 
D) $5 
E) $1 
A) $2 
B) $3 
C) $4 
D) $5 
E) $1

Question 9

Suppose a minimum wage of $4 an hour is in force,resulting in unemployment of 10 million hours.Then the demand for labour increases such that supply and demand intersect at a wage rate of $5 per hour.What will happen to the equilibrium wage rate and employment?

Accepted Answer

A) The wage rate is $5 an hour and there will be no unemployment. 
B) The wage rate is $5 an hour and there will be a surplus of labour. 
C) The wage rate is $4 an hour and there will be a surplus of labour. 
D) The wage rate is $4 an hour and there will be no unemployment. 
E) The wage rate is $4 an hour and there will be unemployment. 
A) The wage rate is $5 an hour and there will be no unemployment. 
B) The wage rate is $5 an hour and there will be a surplus of labour. 
C) The wage rate is $4 an hour and there will be a surplus of labour. 
D) The wage rate is $4 an hour and there will be no unemployment. 
E) The wage rate is $4 an hour and there will be unemployment.

Question 10

If the demand for a good is perfectly elastic,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 11

According to the fair result view of fairness,a fair outcome in the housing market

Accepted Answer

A) is the one that blocks voluntary exchange of housing. 
B) cannot be created in the housing industry. 
C) is one that allocates scarce housing resources to those who are willing and able to pay. 
D) is one that allocates scarce housing resources by lottery. 
E) is one that allocates scarce housing resources to the poorest. 
A) is the one that blocks voluntary exchange of housing. 
B) cannot be created in the housing industry. 
C) is one that allocates scarce housing resources to those who are willing and able to pay. 
D) is one that allocates scarce housing resources by lottery. 
E) is one that allocates scarce housing resources to the poorest.

Question 12

Use the figure below to answer the following questions.
   
Figure 6.3.2
-Refer to Figure 6.3.2.Between 200 and 300 units,demand is

Accepted Answer

A) inelastic. 
B) unit elastic. 
C) elastic. 
D) perfectly inelastic. 
E) perfectly elastic. 
A) inelastic. 
B) unit elastic. 
C) elastic. 
D) perfectly inelastic. 
E) perfectly elastic.

Question 13

A lottery allocates housing to those

Accepted Answer

A) who are poor. 
B) who share similar views to the owner of the housing. 
C) who are rich. 
D) whose names are on waiting lists. 
E) who are lucky. 
A) who are poor. 
B) who share similar views to the owner of the housing. 
C) who are rich. 
D) whose names are on waiting lists. 
E) who are lucky.

Question 14

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 highest?

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 15

The seller pays most of a tax if demand is relatively elastic because

Accepted Answer

A) the buyer can easily substitute to other markets. 
B) the seller can easily substitute to other markets. 
C) the government forces the seller to bear the burden of the tax. 
D) there is a black market for this good. 
E) the seller cannot easily substitute to other goods. 
A) the buyer can easily substitute to other markets. 
B) the seller can easily substitute to other markets. 
C) the government forces the seller to bear the burden of the tax. 
D) there is a black market for this good. 
E) the seller cannot easily substitute to other goods.

Question 16

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.Government revenue from the tax is

Accepted Answer

A) $4,000. 
B) $5,000. 
C) $22,400. 
D) $26,400. 
E) $30,000. 
A) $4,000. 
B) $5,000. 
C) $22,400. 
D) $26,400. 
E) $30,000.

Question 17

Suppose the minimum wage is $4 per hour,and 1,100 units of labour are hired.Then the government raises the minimum wage to $6 per hour,and 900 units are now hired.Choose the correct statement.

Accepted Answer

A) Total wages paid to workers has fallen. 
B) The price elasticity of demand for labour is 0.5. 
C) There is unemployment in this labour market. 
D) The quantity of labour supplied is greater at the higher minimum wage. 
E) all of the above except A 
A) Total wages paid to workers has fallen. 
B) The price elasticity of demand for labour is 0.5. 
C) There is unemployment in this labour market. 
D) The quantity of labour supplied is greater at the higher minimum wage. 
E) all of the above except A

Question 18

Suppose the demand for gasoline is inelastic,but not perfectly inelastic,and the supply is elastic,but not perfectly elastic.A tax on gasoline is paid

Accepted Answer

A) mostly by buyers. 
B) mostly by sellers. 
C) equally by buyers and sellers. 
D) totally by buyers. 
E) totally by sellers. 
A) mostly by buyers. 
B) mostly by sellers. 
C) equally by buyers and sellers. 
D) totally by buyers. 
E) totally by sellers.

Question 19

Consider a market for an illegal good.If the government imposes the cost of breaking the law on the buyer of the good,then price will be

Accepted Answer

A) higher and quantity lower compared to imposing the same cost on the seller. 
B) higher and quantity higher compared to imposing the same cost on the seller. 
C) lower and quantity lower compared to imposing the same cost on the seller. 
D) lower and quantity the same compared to imposing the same cost on the seller. 
E) higher and quantity the same compared to imposing the same cost on the seller. 
A) higher and quantity lower compared to imposing the same cost on the seller. 
B) higher and quantity higher compared to imposing the same cost on the seller. 
C) lower and quantity lower compared to imposing the same cost on the seller. 
D) lower and quantity the same compared to imposing the same cost on the seller. 
E) higher and quantity the same compared to imposing the same cost on the seller.

Question 20

The buyer pays most of a tax if demand is relatively inelastic because

Accepted Answer

A) the buyer cannot easily substitute to other markets. 
B) the buyer can easily substitute to other markets. 
C) the government forces the seller to bear the burden of the tax. 
D) there is a black market for this good. 
E) the seller cannot easily substitute to other goods. 
A) the buyer cannot easily substitute to other markets. 
B) the buyer can easily substitute to other markets. 
C) the government forces the seller to bear the burden of the tax. 
D) there is a black market for this good. 
E) the seller cannot easily substitute to other goods.

Exam 6: Government Actions in Markets

Which one of the following is not likely to be an outcome of a rent ceiling?

First-come,first-served allocates housing to those

If the price of a good is not affected by a tax,then

Suppose the cost of breaking the law is imposed on the buyers of an illegal good.This action will have its biggest impact on quantity if the demand for the good 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.Which one of the following costs of breaking the law imposed on the buyers of the good would reduce the quantity to zero?

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 there is a strictly enforced rent ceiling of $150 per room,

Use the figure below to answer the following questions. Figure 6.2.1 -Refer to Figure 6.2.1.Suppose a $5 per hour minimum wage is in force.What is the lowest wage per hour an unemployed person would be willing to accept?

Suppose a minimum wage of $4 an hour is in force,resulting in unemployment of 10 million hours.Then the demand for labour increases such that supply and demand intersect at a wage rate of $5 per hour.What will happen to the equilibrium wage rate and employment?

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

According to the fair result view of fairness,a fair outcome in the housing market

Use the figure below to answer the following questions. Figure 6.3.2 -Refer to Figure 6.3.2.Between 200 and 300 units,demand is

A lottery allocates housing to those

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 highest?

The seller pays most of a tax if demand is relatively elastic because

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.Government revenue from the tax is

Suppose the minimum wage is $4 per hour,and 1,100 units of labour are hired.Then the government raises the minimum wage to $6 per hour,and 900 units are now hired.Choose the correct statement.

Suppose the demand for gasoline is inelastic,but not perfectly inelastic,and the supply is elastic,but not perfectly elastic.A tax on gasoline is paid

Consider a market for an illegal good.If the government imposes the cost of breaking the law on the buyer of the good,then price will be

The buyer pays most of a tax if demand is relatively inelastic because

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

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