Question 1

-The above figure shows the market for finish carpenters in Bozeman.If there is a minimum wage set at $18,what is true?

Accepted Answer

A)  The lowest wage for which someone is willing to work is $18 an hour. 
B)  The quantity of jobs increases to 400. 
C)  The lowest wage for which someone is willing to work is $20 an hour. 
D)  200 workers are employed. 
E)  The quantity of jobs demanded is more than the quantity supplied. 
A)  The lowest wage for which someone is willing to work is $18 an hour. 
B)  The quantity of jobs increases to 400. 
C)  The lowest wage for which someone is willing to work is $20 an hour. 
D)  200 workers are employed. 
E)  The quantity of jobs demanded is more than the quantity supplied.

Question 2

The figure above shows supply and demand in the market for labor. The government introduces a minimum wage of $7 per hour.
-The figure above shows that the value of the resources used in job-search activity can be as large as ________ per hour.

Accepted Answer

A)  $12,000 
B)  $8,000 
C)  $6,000 
D)  $4,000 
E)  $2,000 
A)  $12,000 
B)  $8,000 
C)  $6,000 
D)  $4,000 
E)  $2,000

Question 3

The figure above shows supply and demand in the market for labor. The government introduces a minimum wage of $7 per hour.
-In the figure above,the deadweight loss is

Accepted Answer

A)  $4,000 an hour. 
B)  $2,000 an hour. 
C)  $1,000 an hour. 
D)  $5,000 an hour. 
E)  zero. 
A)  $4,000 an hour. 
B)  $2,000 an hour. 
C)  $1,000 an hour. 
D)  $5,000 an hour. 
E)  zero.

Question 4

Which of the following is true?
i.A price support is inefficient.
ii.A price floor set above the equilibrium price creates a surplus.
iii.A price ceiling set above the equilibrium price creates a black market.

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 5

To have an effective price support program,the government must
i.isolate the domestic market from the world market.
ii.pay the farmers a subsidy.
iii.introduce a price floor.

Accepted Answer

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

Question 6

-The figure above shows the labor market in a region.For a minimum wage to change the wage rate and amount of employment,it must be

Accepted Answer

A)  left to the forces of supply and demand. 
B)  set above $6 an hour. 
C)  set equal to $6 an hour. 
D)  set below $6 an hour. 
E)  set at $12 per hour. 
A)  left to the forces of supply and demand. 
B)  set above $6 an hour. 
C)  set equal to $6 an hour. 
D)  set below $6 an hour. 
E)  set at $12 per hour.

Question 7

The figure above shows the supply and demand curves in the market for rental housing. A rent ceiling is set at $400 per month.
-As shown in the figure above,the rent ceiling ________ consumer surplus and ________ producer surplus.

Accepted Answer

A)  decreases; decreases 
B)  decreases; increases 
C)  increases; increases 
D)  increases; decreases 
E)  decreases; does not change 
A)  decreases; decreases 
B)  decreases; increases 
C)  increases; increases 
D)  increases; decreases 
E)  decreases; does not change

Question 8

Rent ceilings

Accepted Answer

A)  increase search activity. 
B)  result in surpluses. 
C)  create efficiency. 
D)  benefit producers. 
E)  have no effect if they are set below the equilibrium rent. 
A)  increase search activity. 
B)  result in surpluses. 
C)  create efficiency. 
D)  benefit producers. 
E)  have no effect if they are set below the equilibrium rent.

Question 9

The figure above shows the market for sugar beets. The government intervenes in this market and sets a support price at $35 a ton.
-The figure above shows that the deadweight loss from the government's policy is

Accepted Answer

A)  about $350 million. 
B)  about $25 million. 
C)  about $50 million. 
D)  about $100 million. 
E)  zero. 
A)  about $350 million. 
B)  about $25 million. 
C)  about $50 million. 
D)  about $100 million. 
E)  zero.

Question 10

The figure above shows the market for sugar beets. The government intervenes in this market and sets a support price at $35 a ton.
-The figure above shows that the government provides a subsidy to the farmers of ________ million.

Accepted Answer

A)  $350 
B)  $1,050 
C)  $50 
D)  $100 
E)  $700 
A)  $350 
B)  $1,050 
C)  $50 
D)  $100 
E)  $700

Question 11

A price ceiling

Accepted Answer

A)  is an illegal price. 
B)  is the price that exists in a black market. 
C)  is the maximum price that can legally be charged. 
D)  Both answers A and B are correct. 
E)  Both answers B and C are correct. 
A)  is an illegal price. 
B)  is the price that exists in a black market. 
C)  is the maximum price that can legally be charged. 
D)  Both answers A and B are correct. 
E)  Both answers B and C are correct.

Question 12

A price floor makes prices

Accepted Answer

A)  below the price floor illegal. 
B)  above the price floor illegal. 
C)  below the equilibrium price illegal. 
D)  above the equilibrium price illegal. 
E)  None of the above answers is correct. 
A)  below the price floor illegal. 
B)  above the price floor illegal. 
C)  below the equilibrium price illegal. 
D)  above the equilibrium price illegal. 
E)  None of the above answers is correct.

Question 13

-In the figure above,if the wage rate is $6 per hour,then the

Accepted Answer

A)  firms' surplus is the area d + e + f. 
B)  workers' surplus is the area a + b + c. 
C)  deadweight loss equals zero. 
D)  Only answers A and C are correct. 
E)  Answers A, B, and C are correct. 
A)  firms' surplus is the area d + e + f. 
B)  workers' surplus is the area a + b + c. 
C)  deadweight loss equals zero. 
D)  Only answers A and C are correct. 
E)  Answers A, B, and C are correct.

Question 14

If a minimum wage is introduced that is above the equilibrium wage rate,

Accepted Answer

A)  the quantity of labor demanded increases. 
B)  job search activity increases. 
C)  the supply of labor increases and the supply of labor curve shifts rightward. 
D)  unemployment decreases because more workers accept jobs at the higher minimum wage rate. 
E)  the quantity of labor supplied decreases because of the increase in unemployment. 
A)  the quantity of labor demanded increases. 
B)  job search activity increases. 
C)  the supply of labor increases and the supply of labor curve shifts rightward. 
D)  unemployment decreases because more workers accept jobs at the higher minimum wage rate. 
E)  the quantity of labor supplied decreases because of the increase in unemployment.

Question 15

A price ceiling

Accepted Answer

A)  creates market efficiency by making a good cheaper. 
B)  helps all producers by increasing the price of the good. 
C)  can create a black market for the good. 
D)  reduces search activity. 
E)  benefits all people who want to buy the good. 
A)  creates market efficiency by making a good cheaper. 
B)  helps all producers by increasing the price of the good. 
C)  can create a black market for the good. 
D)  reduces search activity. 
E)  benefits all people who want to buy the good.

Question 16

If a rent ceiling is set ________ the equilibrium price,the effect can result in a housing ________.

Accepted Answer

A)  below; surplus 
B)  below; shortage 
C)  above; shortage 
D)  above; surplus 
E)  equal to; surplus 
A)  below; surplus 
B)  below; shortage 
C)  above; shortage 
D)  above; surplus 
E)  equal to; surplus

Question 17

Which of the following is an example of the unfairness of rent control?

Accepted Answer

A)  Voluntary exchange is encouraged by rent control. 
B)  Racial discrimination in renting is discouraged by rent control. 
C)  Newcomers have a more difficult time finding apartments. 
D)  Rich people do not get apartments in these markets. 
E)  Too many people rent apartments. 
A)  Voluntary exchange is encouraged by rent control. 
B)  Racial discrimination in renting is discouraged by rent control. 
C)  Newcomers have a more difficult time finding apartments. 
D)  Rich people do not get apartments in these markets. 
E)  Too many people rent apartments.

Question 18

Producers favor a ________ because ________.

Accepted Answer

A)  price ceiling; the equilibrium price increases 
B)  price support; the deadweight loss is minimized 
C)  price ceiling; total revenue increases 
D)  price support; total revenue increases 
E)  price ceiling; consumer surplus increases 
A)  price ceiling; the equilibrium price increases 
B)  price support; the deadweight loss is minimized 
C)  price ceiling; total revenue increases 
D)  price support; total revenue increases 
E)  price ceiling; consumer surplus increases

Question 19

If a price ceiling is set above the equilibrium price,then

Accepted Answer

A)  there will be a surplus of the good. 
B)  there will be a shortage of the good. 
C)  there will be neither a shortage nor a surplus of the good. 
D)  the price ceiling will generate revenue for the government. 
E)  the price ceiling affects suppliers but not demanders. 
A)  there will be a surplus of the good. 
B)  there will be a shortage of the good. 
C)  there will be neither a shortage nor a surplus of the good. 
D)  the price ceiling will generate revenue for the government. 
E)  the price ceiling affects suppliers but not demanders.

Question 20

-The figure above illustrates the current market for fast-food workers in Baltimore.
a.Without any government intervention,what is the equilibrium wage rate and amount of employment?
b.If the city government imposes a minimum wage of $3 an hour,what is the amount of employment? Does the minimum wage create any unemployment? Why or why not?
c.If the city government imposes a minimum wage of $6 an hour,what is the amount of employment? Does the minimum wage create any unemployment? Why or why not?

Accepted Answer

a.The equilibrium wage rate is $4 an hou

-The above figure shows the market for finish carpenters in Bozeman.If there is a minimum wage set at $18,what is true?

The figure above shows supply and demand in the market for labor. The government introduces a minimum wage of $7 per hour. -The figure above shows that the value of the resources used in job-search activity can be as large as ________ per hour.

The figure above shows supply and demand in the market for labor. The government introduces a minimum wage of $7 per hour. -In the figure above,the deadweight loss is

Which of the following is true? i.A price support is inefficient. ii.A price floor set above the equilibrium price creates a surplus. iii.A price ceiling set above the equilibrium price creates a black market.

To have an effective price support program,the government must i.isolate the domestic market from the world market. ii.pay the farmers a subsidy. iii.introduce a price floor.

-The figure above shows the labor market in a region.For a minimum wage to change the wage rate and amount of employment,it must be

The figure above shows the supply and demand curves in the market for rental housing. A rent ceiling is set at $400 per month. -As shown in the figure above,the rent ceiling consumer surplus and producer surplus.

Rent ceilings

The figure above shows the market for sugar beets. The government intervenes in this market and sets a support price at $35 a ton. -The figure above shows that the deadweight loss from the government's policy is

The figure above shows the market for sugar beets. The government intervenes in this market and sets a support price at $35 a ton. -The figure above shows that the government provides a subsidy to the farmers of ________ million.

A price ceiling

A price floor makes prices

-In the figure above,if the wage rate is $6 per hour,then the

If a minimum wage is introduced that is above the equilibrium wage rate,

A price ceiling

If a rent ceiling is set the equilibrium price,the effect can result in a housing .

Which of the following is an example of the unfairness of rent control?

Producers favor a because .

If a price ceiling is set above the equilibrium price,then

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

-The above figure shows the market for finish carpenters in Bozeman.If there is a minimum wage set at $18,what is true?

The figure above shows supply and demand in the market for labor. The government introduces a minimum wage of $7 per hour. -The figure above shows that the value of the resources used in job-search activity can be as large as ________ per hour.

The figure above shows supply and demand in the market for labor. The government introduces a minimum wage of $7 per hour. -In the figure above,the deadweight loss is

Which of the following is true? i.A price support is inefficient. ii.A price floor set above the equilibrium price creates a surplus. iii.A price ceiling set above the equilibrium price creates a black market.

To have an effective price support program,the government must i.isolate the domestic market from the world market. ii.pay the farmers a subsidy. iii.introduce a price floor.

-The figure above shows the labor market in a region.For a minimum wage to change the wage rate and amount of employment,it must be

The figure above shows the supply and demand curves in the market for rental housing. A rent ceiling is set at $400 per month. -As shown in the figure above,the rent ceiling ________ consumer surplus and ________ producer surplus.

Rent ceilings

The figure above shows the market for sugar beets. The government intervenes in this market and sets a support price at $35 a ton. -The figure above shows that the deadweight loss from the government's policy is

The figure above shows the market for sugar beets. The government intervenes in this market and sets a support price at $35 a ton. -The figure above shows that the government provides a subsidy to the farmers of ________ million.

A price ceiling

A price floor makes prices

-In the figure above,if the wage rate is $6 per hour,then the

If a minimum wage is introduced that is above the equilibrium wage rate,

A price ceiling

If a rent ceiling is set ________ the equilibrium price,the effect can result in a housing ________.

Which of the following is an example of the unfairness of rent control?

Producers favor a ________ because ________.

If a price ceiling is set above the equilibrium price,then

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

The figure above shows the supply and demand curves in the market for rental housing. A rent ceiling is set at $400 per month. -As shown in the figure above,the rent ceiling consumer surplus and producer surplus.

If a rent ceiling is set the equilibrium price,the effect can result in a housing .

Producers favor a because .