Question 1

-In the above figure, if the minimum wage is set at $6 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 2

The less elastic the supply, the

Accepted Answer

A)  less likely the government is to tax the product. 
B)  less likely the government is to impose a price ceiling. 
C)  larger the fraction of any tax imposed on the product that is paid by the suppliers. 
D)  less elastic the demand. 
A)  less likely the government is to tax the product. 
B)  less likely the government is to impose a price ceiling. 
C)  larger the fraction of any tax imposed on the product that is paid by the suppliers. 
D)  less elastic the demand.

Question 3

The supply of oil is more elastic than the demand for oil. If oil is taxed $10 per barrel, how will the tax be divided between the buyers and sellers?

Accepted Answer

A)  The sellers will pay more of the tax than the buyers. 
B)  The buyers will pay more of the tax than the sellers. 
C)  The sellers and buyers will split the tax evenly. 
D)  The sellers will pay the entire tax. 
A)  The sellers will pay more of the tax than the buyers. 
B)  The buyers will pay more of the tax than the sellers. 
C)  The sellers and buyers will split the tax evenly. 
D)  The sellers will pay the entire tax.

Question 4

A rent ceiling creates a shortage. As a result, there is

Accepted Answer

A)  an efficient allocation of housing. 
B)  a surplus of housing. 
C)  an increase in the producer surplus in the housing market. 
D)  a decrease in the producer surplus in the housing market. 
A)  an efficient allocation of housing. 
B)  a surplus of housing. 
C)  an increase in the producer surplus in the housing market. 
D)  a decrease in the producer surplus in the housing market.

Question 5

-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 6

Explain how a price floor set above the equilibrium market price for a good can cause a surplus of that good.

Accepted Answer

At the market equilibrium price, the qua

Question 7

-In the above figure, a price floor of $4

Accepted Answer

A)  leads to a shortage. 
B)  leads to a surplus. 
C)  has no effect. 
D)  shifts the demand curve leftward. 
A)  leads to a shortage. 
B)  leads to a surplus. 
C)  has no effect. 
D)  shifts the demand curve leftward.

Question 8

A sales tax on sellers of a good shifts the supply curve leftward because the tax is like a cost of production.

Accepted Answer

A) True 
 B)False

Question 9

If the minimum wage is set above the equilibrium wage, a supply and demand diagram of the low-skilled labor market will show unemployment as

Accepted Answer

A)  a vertical distance. 
B)  a horizontal distance. 
C)  the area of a rectangle. 
D)  the area of a triangle. 
A)  a vertical distance. 
B)  a horizontal distance. 
C)  the area of a rectangle. 
D)  the area of a triangle.

Question 10

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 11

The federal government pays airlines to service small cities in the United States through a subsidy program called Essential Air Service which was established in 1978 when the airline industry was deregulated. Most subsidies can't exceed $200 per passenger. What would happen if the government increased the subsidy to $400 per passenger?

Accepted Answer

A)  There would be a fall in price and increase in quantity produced. 
B)  Government payments to airlines would decrease. 
C)  Consumer surplus would decrease. 
D)  Supply would shift to the left. 
A)  There would be a fall in price and increase in quantity produced. 
B)  Government payments to airlines would decrease. 
C)  Consumer surplus would decrease. 
D)  Supply would shift to the left.

Question 12

A price ceiling, such as a rent ceiling

Accepted Answer

A)  always results in a surplus. 
B)  always results in a shortage. 
C)  results in a surplus if the ceiling price is less than the equilibrium price. 
D)  results in a shortage if the ceiling price is less than the equilibrium price. 
A)  always results in a surplus. 
B)  always results in a shortage. 
C)  results in a surplus if the ceiling price is less than the equilibrium price. 
D)  results in a shortage if the ceiling price is less than the equilibrium price.

Question 13

What occurs if a price floor is set above the equilibrium price? What occurs if a price ceiling is set below the equilibrium price?

Accepted Answer

A price floor set above the equilibrium

Question 14

-The figure above shows the demand for and supply of rental housing in Smallton. If a rent ceiling is set at $800, there is

Accepted Answer

A)  a shortage of 3,000 units of rental housing. 
B)  a shortage of 6,000 units of rental housing. 
C)  a surplus of 3,000 units of rental housing. 
D)  neither a shortage nor a surplus of rental housing. 
A)  a shortage of 3,000 units of rental housing. 
B)  a shortage of 6,000 units of rental housing. 
C)  a surplus of 3,000 units of rental housing. 
D)  neither a shortage nor a surplus of rental housing.

Question 15

To try to help farmers, governments I. set production quotas.
II) set price ceilings.

Accepted Answer

A)  I and II 
B)  only II 
C)  only I 
D)  neither I nor II 
A)  I and II 
B)  only II 
C)  only I 
D)  neither I nor II

Question 16

-In the above figure, CBL is the cost of breaking the law. If it is illegal to buy and sell, then the price per unit will be

Accepted Answer

A)  $500. 
B)  $400. 
C)  $300. 
D)  $200. 
A)  $500. 
B)  $400. 
C)  $300. 
D)  $200.

Question 17

Which of the following is a result of a rent ceiling set below the equilibrium rent? I. equity in the housing market
II) efficient allocation of resources
III) a shortage of housing units.

Accepted Answer

A)  I and II 
B)  I and III 
C)  II only 
D)  III only 
A)  I and II 
B)  I and III 
C)  II only 
D)  III only

Question 18

-The figure above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $16 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 19

If demand is perfectly elastic, a sales tax is paid by

Accepted Answer

A)  only the buyers. 
B)  only the sellers. 
C)  both the buyers and sellers. 
D)  None of the above answers is correct. 
A)  only the buyers. 
B)  only the sellers. 
C)  both the buyers and sellers. 
D)  None of the above answers is correct.

Question 20

If enforcement is aimed at sellers of an illegal good, its equilibrium price will ________ and its equilibrium quantity will ________.

Accepted Answer

A)  rise; increase 
B)  rise; decrease 
C)  fall; increase 
D)  fall; decrease 
A)  rise; increase 
B)  rise; decrease 
C)  fall; increase 
D)  fall; decrease

-In the above figure, if the minimum wage is set at $6 per hour, what quantity of labor is employed?

The less elastic the supply, the

The supply of oil is more elastic than the demand for oil. If oil is taxed $10 per barrel, how will the tax be divided between the buyers and sellers?

A rent ceiling creates a shortage. As a result, there is

-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 .

Explain how a price floor set above the equilibrium market price for a good can cause a surplus of that good.

-In the above figure, a price floor of $4

A sales tax on sellers of a good shifts the supply curve leftward because the tax is like a cost of production.

If the minimum wage is set above the equilibrium wage, a supply and demand diagram of the low-skilled labor market will show unemployment as

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

A price ceiling, such as a rent ceiling

What occurs if a price floor is set above the equilibrium price? What occurs if a price ceiling is set below the equilibrium price?

-The figure above shows the demand for and supply of rental housing in Smallton. If a rent ceiling is set at $800, there is

To try to help farmers, governments I. set production quotas. II) set price ceilings.

-In the above figure, CBL is the cost of breaking the law. If it is illegal to buy and sell, then the price per unit will be

Which of the following is a result of a rent ceiling set below the equilibrium rent? I. equity in the housing market II) efficient allocation of resources III) a shortage of housing units.

-The figure above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $16 per hour, how many hours of students' labor are unemployed?

If demand is perfectly elastic, a sales tax is paid by

If enforcement is aimed at sellers of an illegal good, its equilibrium price will and its equilibrium quantity will .

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 6: Government Actions in Markets

-In the above figure, if the minimum wage is set at $6 per hour, what quantity of labor is employed?

The less elastic the supply, the

The supply of oil is more elastic than the demand for oil. If oil is taxed $10 per barrel, how will the tax be divided between the buyers and sellers?

A rent ceiling creates a shortage. As a result, there is

-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 ________.

Explain how a price floor set above the equilibrium market price for a good can cause a surplus of that good.

-In the above figure, a price floor of $4

A sales tax on sellers of a good shifts the supply curve leftward because the tax is like a cost of production.

If the minimum wage is set above the equilibrium wage, a supply and demand diagram of the low-skilled labor market will show unemployment as

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

A price ceiling, such as a rent ceiling

What occurs if a price floor is set above the equilibrium price? What occurs if a price ceiling is set below the equilibrium price?

-The figure above shows the demand for and supply of rental housing in Smallton. If a rent ceiling is set at $800, there is

To try to help farmers, governments I. set production quotas. II) set price ceilings.

-In the above figure, CBL is the cost of breaking the law. If it is illegal to buy and sell, then the price per unit will be

Which of the following is a result of a rent ceiling set below the equilibrium rent? I. equity in the housing market II) efficient allocation of resources III) a shortage of housing units.

-The figure above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $16 per hour, how many hours of students' labor are unemployed?

If demand is perfectly elastic, a sales tax is paid by

If enforcement is aimed at sellers of an illegal good, its equilibrium price will ________ and its equilibrium quantity will ________.

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Global Markets in Action

Utility and Demand

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

-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 .

If enforcement is aimed at sellers of an illegal good, its equilibrium price will and its equilibrium quantity will .