Question 1

A minimum wage law

Accepted Answer

A)  lowers the wage rate of workers who are able to get a job. 
B)  increases employment. 
C)  increases the time spent searching by workers who cannot find a job. 
D)  creates efficiency in the labor market. 
E)  must be set below the equilibrium wage rate in order to have an impact. 
A)  lowers the wage rate of workers who are able to get a job. 
B)  increases employment. 
C)  increases the time spent searching by workers who cannot find a job. 
D)  creates efficiency in the labor market. 
E)  must be set below the equilibrium wage rate in order to have an impact.

Question 2

Which of the following is true?
i.A price ceiling is inefficient but fair.
ii.A price floor is inefficient and unfair.
iii.A price support increases the quantity produced.

Accepted Answer

A)  only i 
B)  only ii 
C)  only iii 
D)  i and ii 
E)  ii and iii 
A)  only i 
B)  only ii 
C)  only iii 
D)  i and ii 
E)  ii and iii

Question 3

If the quantity of housing demanded ________ the quantity of housing supplied,scarce housing resources are allocated efficiently because the marginal cost of the housing ________ the marginal benefit.

Accepted Answer

A)  is more than; equals 
B)  is less than; equals 
C)  equals; is more than 
D)  equals; is less than 
E)  equals; equals 
A)  is more than; equals 
B)  is less than; equals 
C)  equals; is more than 
D)  equals; is less than 
E)  equals; equals

Question 4

Who loses and who gains from the minimum wage?

Accepted Answer

A)  Losers are all workers and gainers are all firms. 
B)  Losers are all firms and gainers are all workers. 
C)  Losers are all firms and some workers, while gainers are other workers. 
D)  Gainers are some firms and all workers, while losers are some firms. 
E)  Gainers are some firms and some workers, while losers are other firms and other workers. 
A)  Losers are all workers and gainers are all firms. 
B)  Losers are all firms and gainers are all workers. 
C)  Losers are all firms and some workers, while gainers are other workers. 
D)  Gainers are some firms and all workers, while losers are some firms. 
E)  Gainers are some firms and some workers, while losers are other firms and other workers.

Question 5

Labor unions ________ increases in the minimum wage because an increase in the minimum wage ________ the demand for union labor.

Accepted Answer

A)  support; increases 
B)  support; decreases 
C)  oppose; increases 
D)  oppose; decreases 
E)  support; has no effect on 
A)  support; increases 
B)  support; decreases 
C)  oppose; increases 
D)  oppose; decreases 
E)  support; has no effect on

Question 6

Rent ceilings

Accepted Answer

A)  eliminate the problem of scarcity. 
B)  allocate resources efficiently. 
C)  ensure that housing goes to the poorer people. 
D)  benefit renters living in rent-controlled apartments. 
E)  benefit all landlords because the landlords know what rent to charge their renters. 
A)  eliminate the problem of scarcity. 
B)  allocate resources efficiently. 
C)  ensure that housing goes to the poorer people. 
D)  benefit renters living in rent-controlled apartments. 
E)  benefit all landlords because the landlords know what rent to charge their renters.

Question 7

Labor unions support the minimum wage because

Accepted Answer

A)  the increased unemployment is good for labor. 
B)  the value associated with the deadweight loss goes to labor unions. 
C)  labor unions prefer to operate in black markets. 
D)  it puts upward pressure on all wages. 
E)  union members are usually paid the minimum wage. 
A)  the increased unemployment is good for labor. 
B)  the value associated with the deadweight loss goes to labor unions. 
C)  labor unions prefer to operate in black markets. 
D)  it puts upward pressure on all wages. 
E)  union members are usually paid the minimum wage.

Question 8

In a housing market with a rent ceiling set below the equilibrium rent,

Accepted Answer

A)  some people seeking an apartment to rent will not be able to find one. 
B)  the total cost of renting an apartment will decrease for all those seeking housing. 
C)  some landlords will not be able to find renters to fill available apartments. 
D)  search will decrease because renters no longer need to search for less expensive apartments. 
E)  None of the above answers are correct because to have an impact, the rent ceiling must be set above the equilibrium rent. 
A)  some people seeking an apartment to rent will not be able to find one. 
B)  the total cost of renting an apartment will decrease for all those seeking housing. 
C)  some landlords will not be able to find renters to fill available apartments. 
D)  search will decrease because renters no longer need to search for less expensive apartments. 
E)  None of the above answers are correct because to have an impact, the rent ceiling must be set above the equilibrium rent.

Question 9

Rent ceilings set below the equilibrium rent
i.create a deadweight loss.
ii.increase search activity.
iii.result in a surplus of apartments.

Accepted Answer

A)  i only 
B)  ii only 
C)  i and iii 
D)  i and ii 
E)  i, ii, and iii 
A)  i only 
B)  ii only 
C)  i and iii 
D)  i and ii 
E)  i, ii, and iii

Question 10

Suppose the city of Chicago imposes a rent control program that fixes rents at $400 below the equilibrium rent.With this plan

Accepted Answer

A)  the quantity of apartments demanded will increase. 
B)  the quantity of apartments supplied will increase. 
C)  young people and poor people will have an easier time finding apartments. 
D)  the deadweight loss in Chicago's apartment market will be eliminated. 
E)  there will be a surplus of apartments offered for rent. 
A)  the quantity of apartments demanded will increase. 
B)  the quantity of apartments supplied will increase. 
C)  young people and poor people will have an easier time finding apartments. 
D)  the deadweight loss in Chicago's apartment market will be eliminated. 
E)  there will be a surplus of apartments offered for rent.

Question 11

-The figure above illustrates the current market for apartments in Washington,D.C.
a.If the local government imposes a price ceiling of $1,500 per month,is there a shortage? If so,how much? If not,why not?
b.If the local government imposes a price ceiling of $900 per month,is there a shortage? If so,how much? If not,why not?

Accepted Answer

a.There is not a shortage.The equilibriu

Question 12

When a rent ceiling is ________,consumer surplus and producer surplus shrink,a deadweight loss ________,and resources are lost in search activity and evading the rent ceiling law.

Accepted Answer

A)  inefficient; arises 
B)  inefficient; disappears 
C)  efficient; arises 
D)  efficient; disappears 
E)  nonexistent; arises 
A)  inefficient; arises 
B)  inefficient; disappears 
C)  efficient; arises 
D)  efficient; disappears 
E)  nonexistent; arises

Question 13

One result of the minimum wage is

Accepted Answer

A)  a black market for labor that pays more than the minimum wage. 
B)  a black market for labor that pays less than the minimum wage. 
C)  decreased job search activity. 
D)  a decrease in unemployment among poor and unskilled workers. 
E)  an increase in employment among poor and unskilled workers. 
A)  a black market for labor that pays more than the minimum wage. 
B)  a black market for labor that pays less than the minimum wage. 
C)  decreased job search activity. 
D)  a decrease in unemployment among poor and unskilled workers. 
E)  an increase in employment among poor and unskilled workers.

Question 14

A rent ceiling below the equilibrium rent

Accepted Answer

A)  increases the quantity of housing supplied. 
B)  is an example of a price floor. 
C)  has no effect on the housing market because the ceiling is below the equilibrium. 
D)  can create a black market. 
E)  limits search because people need no longer search for cheap apartments. 
A)  increases the quantity of housing supplied. 
B)  is an example of a price floor. 
C)  has no effect on the housing market because the ceiling is below the equilibrium. 
D)  can create a black market. 
E)  limits search because people need no longer search for cheap apartments.

Question 15

Suppose the equilibrium price of cotton is $100 per ton.A price support set at ________ than $100 per ton ________.

Accepted Answer

A)  less; increases producer surplus 
B)  less; increases consumer surplus 
C)  more; increases consumer surplus 
D)  more; decreases marginal cost 
E)  more; creates a surplus that the government must buy 
A)  less; increases producer surplus 
B)  less; increases consumer surplus 
C)  more; increases consumer surplus 
D)  more; decreases marginal cost 
E)  more; creates a surplus that the government must buy

Question 16

-The above figure shows the market for biologists.The government decides to set a minimum wage for biologists of $18 per hour.After this minimum wage is in effect,unemployment equals ________ workers.

Accepted Answer

A)  100 
B)  300 
C)  400 
D)  500 
E)  200 
A)  100 
B)  300 
C)  400 
D)  500 
E)  200

Question 17

-The figure above shows the labor market in a region.If a minimum wage of $8 an hour is imposed,then there are ________ unemployed workers.

Accepted Answer

A)  20,000 
B)  40,000 
C)  60,000 
D)  80,000 
E)  zero 
A)  20,000 
B)  40,000 
C)  60,000 
D)  80,000 
E)  zero

Question 18

Agricultural price supports in the United States

Accepted Answer

A)  harm U.S. consumers, U.S. taxpayers, and foreign farmers and creates a deadweight loss. 
B)  benefit U.S. taxpayers, U.S. farmers, and U.S. consumers. 
C)  create gains to U.S. farmers that are at least as large as losses to U.S. consumers. 
D)  decrease the deadweight loss and improve market efficiency. 
E)  None of the above answers is correct. 
A)  harm U.S. consumers, U.S. taxpayers, and foreign farmers and creates a deadweight loss. 
B)  benefit U.S. taxpayers, U.S. farmers, and U.S. consumers. 
C)  create gains to U.S. farmers that are at least as large as losses to U.S. consumers. 
D)  decrease the deadweight loss and improve market efficiency. 
E)  None of the above answers is correct.

Question 19

-The above figure shows the market for 2 bedroom town homes in San Diego.If a rent ceiling is set at $1,000 per month,what is true?

Accepted Answer

A)  The quantity of town homes demanded decreases to 100,000. 
B)  Black market rents might be as high as $1,300 per month. 
C)  The quantity of town homes supplied increases to 250,000. 
D)  More town homes are rented after the rent ceiling that before. 
E)  The quantity demanded of town homes is less than the quantity supplied. 
A)  The quantity of town homes demanded decreases to 100,000. 
B)  Black market rents might be as high as $1,300 per month. 
C)  The quantity of town homes supplied increases to 250,000. 
D)  More town homes are rented after the rent ceiling that before. 
E)  The quantity demanded of town homes is less than the quantity supplied.

Question 20

A regulation that sets the lowest price at which it is legal to trade a good is a

Accepted Answer

A)  search ceiling. 
B)  price floor. 
C)  production ceiling. 
D)  price ceiling. 
E)  subsidy. 
A)  search ceiling. 
B)  price floor. 
C)  production ceiling. 
D)  price ceiling. 
E)  subsidy.

A minimum wage law

Which of the following is true? i.A price ceiling is inefficient but fair. ii.A price floor is inefficient and unfair. iii.A price support increases the quantity produced.

If the quantity of housing demanded the quantity of housing supplied,scarce housing resources are allocated efficiently because the marginal cost of the housing the marginal benefit.

Who loses and who gains from the minimum wage?

Labor unions increases in the minimum wage because an increase in the minimum wage the demand for union labor.

Rent ceilings

Labor unions support the minimum wage because

In a housing market with a rent ceiling set below the equilibrium rent,

Rent ceilings set below the equilibrium rent i.create a deadweight loss. ii.increase search activity. iii.result in a surplus of apartments.

Suppose the city of Chicago imposes a rent control program that fixes rents at $400 below the equilibrium rent.With this plan

When a rent ceiling is ,consumer surplus and producer surplus shrink,a deadweight loss ,and resources are lost in search activity and evading the rent ceiling law.

One result of the minimum wage is

A rent ceiling below the equilibrium rent

Suppose the equilibrium price of cotton is $100 per ton.A price support set at than $100 per ton .

-The above figure shows the market for biologists.The government decides to set a minimum wage for biologists of $18 per hour.After this minimum wage is in effect,unemployment equals ________ workers.

-The figure above shows the labor market in a region.If a minimum wage of $8 an hour is imposed,then there are ________ unemployed workers.

Agricultural price supports in the United States

-The above figure shows the market for 2 bedroom town homes in San Diego.If a rent ceiling is set at $1,000 per month,what is true?

A regulation that sets the lowest price at which it is legal to trade a good is a

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 7: Government Actions in Markets

A minimum wage law

Which of the following is true? i.A price ceiling is inefficient but fair. ii.A price floor is inefficient and unfair. iii.A price support increases the quantity produced.

If the quantity of housing demanded ________ the quantity of housing supplied,scarce housing resources are allocated efficiently because the marginal cost of the housing ________ the marginal benefit.

Who loses and who gains from the minimum wage?

Labor unions ________ increases in the minimum wage because an increase in the minimum wage ________ the demand for union labor.

Rent ceilings

Labor unions support the minimum wage because

In a housing market with a rent ceiling set below the equilibrium rent,

Rent ceilings set below the equilibrium rent i.create a deadweight loss. ii.increase search activity. iii.result in a surplus of apartments.

Suppose the city of Chicago imposes a rent control program that fixes rents at $400 below the equilibrium rent.With this plan

When a rent ceiling is ________,consumer surplus and producer surplus shrink,a deadweight loss ________,and resources are lost in search activity and evading the rent ceiling law.

One result of the minimum wage is

A rent ceiling below the equilibrium rent

Suppose the equilibrium price of cotton is $100 per ton.A price support set at ________ than $100 per ton ________.

-The above figure shows the market for biologists.The government decides to set a minimum wage for biologists of $18 per hour.After this minimum wage is in effect,unemployment equals ________ workers.

-The figure above shows the labor market in a region.If a minimum wage of $8 an hour is imposed,then there are ________ unemployed workers.

Agricultural price supports in the United States

-The above figure shows the market for 2 bedroom town homes in San Diego.If a rent ceiling is set at $1,000 per month,what is true?

A regulation that sets the lowest price at which it is legal to trade a good is a

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

If the quantity of housing demanded the quantity of housing supplied,scarce housing resources are allocated efficiently because the marginal cost of the housing the marginal benefit.

Labor unions increases in the minimum wage because an increase in the minimum wage the demand for union labor.

When a rent ceiling is ,consumer surplus and producer surplus shrink,a deadweight loss ,and resources are lost in search activity and evading the rent ceiling law.

Suppose the equilibrium price of cotton is $100 per ton.A price support set at than $100 per ton .