Question 1

-In the above figure, CBL is the cost of breaking the law. If it is illegal to buy and sell, then the quantity of the good bought and sold will be

Accepted Answer

A)  100. 
B)  200. 
C)  300. 
D)  400. 
A)  100. 
B)  200. 
C)  300. 
D)  400.

Question 2

-In the above figure, if the government imposed a minimum wage of $16 per hour in this labor market, the increase in the hourly wage for those who are able to keep their jobs is

Accepted Answer

A)  $4 per hour. 
B)  $8 per hour. 
C)  $12 per hour. 
D)  $16 per hour. 
A)  $4 per hour. 
B)  $8 per hour. 
C)  $12 per hour. 
D)  $16 per hour.

Question 3

-In the above figure, the equilibrium price of a paperback book is $6 per book and the equilibrium quantity is 3 million books. The National Literature Board convinces the government to impose a price ceiling of $3 per book. At this price, the quantity of books supplied to the market will be

Accepted Answer

A)  3 million a month and will equal the quantity demanded. 
B)  less than 3 million a month and will exceed the quantity demanded. 
C)  less than 3 million a month and will be less than the quantity demanded. 
D)  more than 3 million a month and will exceed the quantity demanded. 
A)  3 million a month and will equal the quantity demanded. 
B)  less than 3 million a month and will exceed the quantity demanded. 
C)  less than 3 million a month and will be less than the quantity demanded. 
D)  more than 3 million a month and will exceed the quantity demanded.

Question 4

-The above figure depicts the market for video games. If the government imposed a $3 per game tax on sellers, what would be tax revenue?

Accepted Answer

A)  less than $18 
B)  $18 
C)  more than $18 
D)  More information is needed to determine if the tax revenue is more than, less than, or equal to $18. 
A)  less than $18 
B)  $18 
C)  more than $18 
D)  More information is needed to determine if the tax revenue is more than, less than, or equal to $18.

Question 5

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. Without this subsidy, what is TRUE?

Accepted Answer

A)  There would be higher prices and fewer flights. 
B)  There would be lower prices and fewer flights. 
C)  There would be an increase in supply. 
D)  There would be a decrease in demand. 
A)  There would be higher prices and fewer flights. 
B)  There would be lower prices and fewer flights. 
C)  There would be an increase in supply. 
D)  There would be a decrease in demand.

Question 6

-The above figure shows the apartment rental market in Bigtown. If severe flooding resulted in the destruction of many of the city's apartment buildings, then the

Accepted Answer

A)  supply curve of apartments would shift leftward and rent would rise above $750.00. 
B)  demand curve for apartments would shift rightward and rent would rise above $750.00. 
C)  equilibrium quantity of apartments rented would increase beyond 3,000. 
D)  equilibrium market price of apartments rented would fall below $750.00. 
A)  supply curve of apartments would shift leftward and rent would rise above $750.00. 
B)  demand curve for apartments would shift rightward and rent would rise above $750.00. 
C)  equilibrium quantity of apartments rented would increase beyond 3,000. 
D)  equilibrium market price of apartments rented would fall below $750.00.

Question 7

________ is an illegal activity between buyers and sellers sometimes used to evade a price ceiling.

Accepted Answer

A)  Increased search activity 
B)  A price floor 
C)  Creating a shortage 
D)  A black market 
A)  Increased search activity 
B)  A price floor 
C)  Creating a shortage 
D)  A black market

Question 8

-The figure above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $12 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 9

If buyers of illegal goods are punished but sellers are not, then the 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 10

-The market for unskilled labor is illustrated in the figure above. The market is in equilibrium and then a minimum wage of $8 per hour is imposed. Employment will decrease by

Accepted Answer

A)  0 hours. 
B)  10 million hours per year. 
C)  20 million hours per year. 
D)  30 million hours per year. 
A)  0 hours. 
B)  10 million hours per year. 
C)  20 million hours per year. 
D)  30 million hours per year.

Question 11

-The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. How much consumer surplus is lost?

Accepted Answer

A)  $10,000 
B)  $20,000 
C)  $25,000 
D)  $40,000 
A)  $10,000 
B)  $20,000 
C)  $25,000 
D)  $40,000

Question 12

"The tax on insulin in the Philippines is anywhere between 10 and 20 percent. If you are rich and living in the Philippines, this is not a problem, but if you are poor, then insulin becomes something that you cannot afford." Why do buyers care so much about a tax on insulin, a vital daily medicine for those with diabetes?

Accepted Answer

A)  because buyers pay virtually the entire tax on insulin because the demand is almost perfectly inelastic 
B)  because sellers increase their profit when there is a tax 
C)  because more insulin can be provided to those in need 
D)  because the tax incidence is equal between the buyers and sellers 
A)  because buyers pay virtually the entire tax on insulin because the demand is almost perfectly inelastic 
B)  because sellers increase their profit when there is a tax 
C)  because more insulin can be provided to those in need 
D)  because the tax incidence is equal between the buyers and sellers

Question 13

When a good is made illegal, which of the following definitely results in the price rising?

Accepted Answer

A)  a much higher fine on sellers than on buyers 
B)  a much higher fine on buyers than on sellers 
C)  any fine imposed on both buyers or sellers 
D)  any fine imposed on buyers 
A)  a much higher fine on sellers than on buyers 
B)  a much higher fine on buyers than on sellers 
C)  any fine imposed on both buyers or sellers 
D)  any fine imposed on buyers

Question 14

If sanctions are imposed on buyers but NOT on sellers of an illegal good, 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 15

A rent ceiling set above the equilibrium rent efficiently allocates resources in the housing market.

Accepted Answer

A) True 
 B)False

Question 16

-In the table above, the market is in equilibrium. Then a minimum wage is set at $11 per hour. The number of unemployed workers will be

Accepted Answer

A)  0. 
B)  2 million. 
C)  4 million. 
D)  6 million. 
A)  0. 
B)  2 million. 
C)  4 million. 
D)  6 million.

Question 17

Imposing a minimum wage that is above the equilibrium wage rate results in

Accepted Answer

A)  higher job search costs. 
B)  lower unemployment. 
C)  the labor market becoming more efficient. 
D)  equilibrium in the labor market. 
A)  higher job search costs. 
B)  lower unemployment. 
C)  the labor market becoming more efficient. 
D)  equilibrium in the labor market.

Question 18

-The figure above illustrates a rental housing market in which there is a rent ceiling of $400 a month. The rent ceiling is strictly enforced. The number of apartments rented is

Accepted Answer

A)  less than 2 thousand. 
B)  2 thousand. 
C)  3 thousand. 
D)  4 thousand. 
A)  less than 2 thousand. 
B)  2 thousand. 
C)  3 thousand. 
D)  4 thousand.

Question 19

-The figure above shows the market for milk in Cowland. If a subsidy paid to producers of $1 per gallon of milk is introduced, what is the amount, including the subsidy, that suppliers keep per gallon?

Accepted Answer

A)  $3.00 a gallon 
B)  between $3.00 and $4.00 per gallon 
C)  $4.00 a gallon 
D)  between $4.00 and $5.00 per gallon 
A)  $3.00 a gallon 
B)  between $3.00 and $4.00 per gallon 
C)  $4.00 a gallon 
D)  between $4.00 and $5.00 per gallon

Question 20

In general, a fine on selling a product leads to the

Accepted Answer

A)  supply curve shifting rightward. 
B)  supply curve shifting leftward. 
C)  demand curve shifting rightward. 
D)  demand curve shifting leftward. 
A)  supply curve shifting rightward. 
B)  supply curve shifting leftward. 
C)  demand curve shifting rightward. 
D)  demand curve shifting leftward.

-In the above figure, CBL is the cost of breaking the law. If it is illegal to buy and sell, then the quantity of the good bought and sold will be

-In the above figure, if the government imposed a minimum wage of $16 per hour in this labor market, the increase in the hourly wage for those who are able to keep their jobs is

-In the above figure, the equilibrium price of a paperback book is $6 per book and the equilibrium quantity is 3 million books. The National Literature Board convinces the government to impose a price ceiling of $3 per book. At this price, the quantity of books supplied to the market will be

-The above figure depicts the market for video games. If the government imposed a $3 per game tax on sellers, what would be tax revenue?

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. Without this subsidy, what is TRUE?

-The above figure shows the apartment rental market in Bigtown. If severe flooding resulted in the destruction of many of the city's apartment buildings, then the

________ is an illegal activity between buyers and sellers sometimes used to evade a price ceiling.

-The figure above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $12 per hour, how many hours of students' labor are unemployed?

If buyers of illegal goods are punished but sellers are not, then the price and the equilibrium quantity .

-The market for unskilled labor is illustrated in the figure above. The market is in equilibrium and then a minimum wage of $8 per hour is imposed. Employment will decrease by

-The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. How much consumer surplus is lost?

When a good is made illegal, which of the following definitely results in the price rising?

If sanctions are imposed on buyers but NOT on sellers of an illegal good, then the equilibrium price and the equilibrium quantity .

A rent ceiling set above the equilibrium rent efficiently allocates resources in the housing market.

-In the table above, the market is in equilibrium. Then a minimum wage is set at $11 per hour. The number of unemployed workers will be

Imposing a minimum wage that is above the equilibrium wage rate results in

-The figure above illustrates a rental housing market in which there is a rent ceiling of $400 a month. The rent ceiling is strictly enforced. The number of apartments rented is

-The figure above shows the market for milk in Cowland. If a subsidy paid to producers of $1 per gallon of milk is introduced, what is the amount, including the subsidy, that suppliers keep per gallon?

In general, a fine on selling a product leads to the

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, CBL is the cost of breaking the law. If it is illegal to buy and sell, then the quantity of the good bought and sold will be

-In the above figure, if the government imposed a minimum wage of $16 per hour in this labor market, the increase in the hourly wage for those who are able to keep their jobs is

-In the above figure, the equilibrium price of a paperback book is $6 per book and the equilibrium quantity is 3 million books. The National Literature Board convinces the government to impose a price ceiling of $3 per book. At this price, the quantity of books supplied to the market will be

-The above figure depicts the market for video games. If the government imposed a $3 per game tax on sellers, what would be tax revenue?

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. Without this subsidy, what is TRUE?

-The above figure shows the apartment rental market in Bigtown. If severe flooding resulted in the destruction of many of the city's apartment buildings, then the

________ is an illegal activity between buyers and sellers sometimes used to evade a price ceiling.

-The figure above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $12 per hour, how many hours of students' labor are unemployed?

If buyers of illegal goods are punished but sellers are not, then the price ________ and the equilibrium quantity ________.

-The market for unskilled labor is illustrated in the figure above. The market is in equilibrium and then a minimum wage of $8 per hour is imposed. Employment will decrease by

-The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. How much consumer surplus is lost?

When a good is made illegal, which of the following definitely results in the price rising?

If sanctions are imposed on buyers but NOT on sellers of an illegal good, then the equilibrium price ________ and the equilibrium quantity ________.

A rent ceiling set above the equilibrium rent efficiently allocates resources in the housing market.

-In the table above, the market is in equilibrium. Then a minimum wage is set at $11 per hour. The number of unemployed workers will be

Imposing a minimum wage that is above the equilibrium wage rate results in

-The figure above illustrates a rental housing market in which there is a rent ceiling of $400 a month. The rent ceiling is strictly enforced. The number of apartments rented is

-The figure above shows the market for milk in Cowland. If a subsidy paid to producers of $1 per gallon of milk is introduced, what is the amount, including the subsidy, that suppliers keep per gallon?

In general, a fine on selling a product leads to the

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

If buyers of illegal goods are punished but sellers are not, then the price and the equilibrium quantity .

If sanctions are imposed on buyers but NOT on sellers of an illegal good, then the equilibrium price and the equilibrium quantity .