Question 1

If the government imposes an effective ________,a deadweight loss ________.

Accepted Answer

A)  price floor; does not occur 
B)  price ceiling; does not occur 
C)  price ceiling; occurs 
D)  price support; does not occur 
E)  Both answers C and D are correct. 
A)  price floor; does not occur 
B)  price ceiling; does not occur 
C)  price ceiling; occurs 
D)  price support; does not occur 
E)  Both answers C and D are correct.

Question 2

With a price support program,who receives a subsidy?

Accepted Answer

A)  only consumers 
B)  only producers 
C)  the government 
D)  importers 
E)  Both consumers and producers receive a subsidy. 
A)  only consumers 
B)  only producers 
C)  the government 
D)  importers 
E)  Both consumers and producers receive a subsidy.

Question 3

Suppose the equilibrium price of a gallon of milk is $4.If the government imposes a price floor of $5 per gallon of milk,

Accepted Answer

A)  the quantity supplied of milk exceeds the quantity demanded. 
B)  the quantity supplied of milk falls short of the quantity demanded. 
C)  the supply increases. 
D)  the market will not be affected. 
E)  there will be a shortage of milk. 
A)  the quantity supplied of milk exceeds the quantity demanded. 
B)  the quantity supplied of milk falls short of the quantity demanded. 
C)  the supply increases. 
D)  the market will not be affected. 
E)  there will be a shortage of milk.

Question 4

The unemployment caused by minimum wage would be larger if

Accepted Answer

A)  both labor demand and labor supply are more elastic. 
B)  both labor demand and labor supply are more inelastic. 
C)  minimum wage is set equal to the equilibrium wage rate. 
D)  minimum wage is set below the equilibrium wage rate. 
E)  both labor demand and labor supply are perfectly inelastic. 
A)  both labor demand and labor supply are more elastic. 
B)  both labor demand and labor supply are more inelastic. 
C)  minimum wage is set equal to the equilibrium wage rate. 
D)  minimum wage is set below the equilibrium wage rate. 
E)  both labor demand and labor supply are perfectly inelastic.

Question 5

-The graph shows the labor market for painters.The lower the wage rate,the ________ is the quantity of painters that firms demand and the ________ is the quantity of painters that households are willing to supply.

Accepted Answer

A)  greater; smaller 
B)  greater; greater 
C)  smaller; greater 
D)  smaller; smaller 
E)  None of the above answers is correct because both the demand and supply curves will shift in response to the change in the wage rate. 
A)  greater; smaller 
B)  greater; greater 
C)  smaller; greater 
D)  smaller; smaller 
E)  None of the above answers is correct because both the demand and supply curves will shift in response to the change in the wage rate.

Question 6

A rent ceiling on housing creates a problem of allocating the available housing units because

Accepted Answer

A)  the demand for housing decreases and the demand curve shifts leftward. 
B)  the supply of housing increases and the supply curve shifts rightward. 
C)  a shortage of apartments occurs. 
D)  a surplus of apartments occurs. 
E)  it eliminates search, which is one of the major ways housing units are allocated. 
A)  the demand for housing decreases and the demand curve shifts leftward. 
B)  the supply of housing increases and the supply curve shifts rightward. 
C)  a shortage of apartments occurs. 
D)  a surplus of apartments occurs. 
E)  it eliminates search, which is one of the major ways housing units are allocated.

Question 7

A price floor is

Accepted Answer

A)  the highest possible legal price that can be charged for a good or service. 
B)  usually equal to the equilibrium price established before the government imposed the price floor. 
C)  the lowest legal price at which a good or service can be traded. 
D)  a legal price of zero that can be charged for a good or service. 
E)  almost always equal to the price ceiling. 
A)  the highest possible legal price that can be charged for a good or service. 
B)  usually equal to the equilibrium price established before the government imposed the price floor. 
C)  the lowest legal price at which a good or service can be traded. 
D)  a legal price of zero that can be charged for a good or service. 
E)  almost always equal to the price ceiling.

Question 8

Which of the following can create a deadweight loss?
i.price supports
ii.price floor
iii.price ceiling

Accepted Answer

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

If the government imposes an effective ,a deadweight loss .

With a price support program,who receives a subsidy?

Suppose the equilibrium price of a gallon of milk is $4.If the government imposes a price floor of $5 per gallon of milk,

The unemployment caused by minimum wage would be larger if

-The graph shows the labor market for painters.The lower the wage rate,the is the quantity of painters that firms demand and the is the quantity of painters that households are willing to supply.

A rent ceiling on housing creates a problem of allocating the available housing units because

A price floor is

Which of the following can create a deadweight loss? i.price supports ii.price floor iii.price ceiling

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

If the government imposes an effective ________,a deadweight loss ________.

With a price support program,who receives a subsidy?

Suppose the equilibrium price of a gallon of milk is $4.If the government imposes a price floor of $5 per gallon of milk,

The unemployment caused by minimum wage would be larger if

-The graph shows the labor market for painters.The lower the wage rate,the ________ is the quantity of painters that firms demand and the ________ is the quantity of painters that households are willing to supply.

A rent ceiling on housing creates a problem of allocating the available housing units because

A price floor is

Which of the following can create a deadweight loss? i.price supports ii.price floor iii.price ceiling

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 government imposes an effective ,a deadweight loss .

-The graph shows the labor market for painters.The lower the wage rate,the is the quantity of painters that firms demand and the is the quantity of painters that households are willing to supply.