Question 1

The deadweight loss in a housing market with a rent ceiling set below the equilibrium rent is the

Accepted Answer

A)  loss to those who cannot find apartments and the gain to landlords who charge black market rents. 
B)  loss to those who cannot find apartments and the loss to landlords who cannot offer housing at the lower rent ceiling. 
C)  loss to landlords and the gain to tenants who pay a fairer rent. 
D)  loss to tenants and the gain to landlords who have the incentive to offer more apartments for rent. 
E)  gain to landlords and to tenants because now a fairer rent is charged. 
A)  loss to those who cannot find apartments and the gain to landlords who charge black market rents. 
B)  loss to those who cannot find apartments and the loss to landlords who cannot offer housing at the lower rent ceiling. 
C)  loss to landlords and the gain to tenants who pay a fairer rent. 
D)  loss to tenants and the gain to landlords who have the incentive to offer more apartments for rent. 
E)  gain to landlords and to tenants because now a fairer rent is charged.

Question 2

-The above figure shows the domestic market for tomatoes.Suppose this market is isolated from global competition and there is a support price set at $16.In this figure,what area equals the deadweight loss?

Accepted Answer

A)  area B + area C + area D + area F 
B)  area E 
C)  area C + area D + area E + area G 
D)  area A 
E)  area F 
A)  area B + area C + area D + area F 
B)  area E 
C)  area C + area D + area E + area G 
D)  area A 
E)  area F

Question 3

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

Accepted Answer

A)  Firms' surplus increases with the minimum wage. 
B)  Workers who retain their jobs have their wages rise. 
C)  The market is efficient. 
D)  The quantity supplied of workers is less that quantity demanded. 
E)  Unemployment decreases because firms employ their workers more carefully. 
A)  Firms' surplus increases with the minimum wage. 
B)  Workers who retain their jobs have their wages rise. 
C)  The market is efficient. 
D)  The quantity supplied of workers is less that quantity demanded. 
E)  Unemployment decreases because firms employ their workers more carefully.

Question 4

$$\begin{array} { c c c } 
\begin{array} { c } 
\text { Price } \
\text { (dollars per scooter) }
\end{array} & \begin{array} { c } 
\text { Quantity demanded } \
\text { (scooters per week) }
\end{array} & \begin{array} { c } 
\text { Quantity supplied } \
\text { (scooters per week) }
\end{array} \
\hline 70 & 120 & 60 \
80 & 110 & 80 \
90 & 100 & 100 \
100 & 90 & 120 \
110 & 80 & 140 \
120 & 70 & 160 \
\hline
\end{array}$$
-The table above gives the supply and demand schedules for scooters.Because of increased injuries sustained by children riding scooters,Citizens Against Scooter Accidents successfully lobbies the government to impose a price floor of $80.00 on scooters.
a.What is the quantity demanded and supplied after the price floor has been imposed?
b.Is there any shortage or surplus at this price floor? If so,how much?
c.If the price floor is raised to $110.00,what is the quantity demanded and supplied?
d.At a price floor of $110.00,is there any shortage or surplus? If so,how much?

Accepted Answer

a.The quantity demanded and supplied is

Question 5

-The graph shows the market for ski chalets in Aspen.The Aspen Tourist Board asks the local government to impose a rent ceiling on ski chalets.If the rent ceiling is set at $1,900 a week,then there is ________.

Accepted Answer

A)  a shortage of 3,000 chalets a week 
B)  a surplus of 3,000 chalets a week 
C)  neither a shortage nor surplus of chalets 
D)  a shortage of 6,000 chalets a week 
E)  a surplus of 6,000 chalets a week. 
A)  a shortage of 3,000 chalets a week 
B)  a surplus of 3,000 chalets a week 
C)  neither a shortage nor surplus of chalets 
D)  a shortage of 6,000 chalets a week 
E)  a surplus of 6,000 chalets a week.

Question 6

-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,the deadweight loss equals ________.

Accepted Answer

A)  $400 
B)  $200 
C)  $800 
D)  $1600 
E)  $100 
A)  $400 
B)  $200 
C)  $800 
D)  $1600 
E)  $100

Question 7

The "fair results" view of fairness says that a minimum wage law set above the equilibrium wage rate is unfair because the minimum wage

Accepted Answer

A)  does not apply to all workers. 
B)  boosts the income of highly skilled workers. 
C)  benefits only those workers who are able to find and keep a job. 
D)  benefits nobody. 
E)  cannot be enforced. 
A)  does not apply to all workers. 
B)  boosts the income of highly skilled workers. 
C)  benefits only those workers who are able to find and keep a job. 
D)  benefits nobody. 
E)  cannot be enforced.

Question 8

A price floor

Accepted Answer

A)  is the highest price at which it is legal to trade a particular good, service, or factor of production. 
B)  is the lowest price at which it is legal to trade a particular good, service, or factor of production. 
C)  is an illegal price to charge. 
D)  is the equilibrium price when the stock market crashes. 
E)  is the lowest price for which the quantity demanded equals the quantity supplied. 
A)  is the highest price at which it is legal to trade a particular good, service, or factor of production. 
B)  is the lowest price at which it is legal to trade a particular good, service, or factor of production. 
C)  is an illegal price to charge. 
D)  is the equilibrium price when the stock market crashes. 
E)  is the lowest price for which the quantity demanded equals the quantity supplied.

Question 9

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

Accepted Answer

A)  unemployment of 200 workers. 
B)  a surplus of 200 workers. 
C)  unemployment of 400 workers. 
D)  a surplus of 400 workers. 
E)  no unemployment of workers and no surplus of workers. 
A)  unemployment of 200 workers. 
B)  a surplus of 200 workers. 
C)  unemployment of 400 workers. 
D)  a surplus of 400 workers. 
E)  no unemployment of workers and no surplus of workers.

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 subsidy accounts for ________ percent of the farmers' revenue.

Accepted Answer

A)  33 
B)  67 
C)  50 
D)  100 
E)  25 
A)  33 
B)  67 
C)  50 
D)  100 
E)  25

Question 11

When the minimum wage is raised,the ________ union labor ________.

Accepted Answer

A)  demand for; increases 
B)  demand for; decreases 
C)  supply of; increases 
D)  supply of; decreases 
E)  demand for; does not change 
A)  demand for; increases 
B)  demand for; decreases 
C)  supply of; increases 
D)  supply of; decreases 
E)  demand for; does not change

Question 12

One result of a minimum wage is

Accepted Answer

A)  illegal hiring of people at wages below the minimum wage. 
B)  more people with jobs. 
C)  a change in the equilibrium wage. 
D)  lower costs paid by firms. 
E)  fewer people searching for work because they realize that firms have decreased the number of people hired. 
A)  illegal hiring of people at wages below the minimum wage. 
B)  more people with jobs. 
C)  a change in the equilibrium wage. 
D)  lower costs paid by firms. 
E)  fewer people searching for work because they realize that firms have decreased the number of people hired.

Question 13

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

Accepted Answer

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

Question 14

Rent controls

Accepted Answer

A)  create a deadweight loss. 
B)  increase maintenance by landlords. 
C)  benefit people who live in rent controlled apartments. 
D)  Both answers A and C are correct. 
E)  Both answers B and C are correct. 
A)  create a deadweight loss. 
B)  increase maintenance by landlords. 
C)  benefit people who live in rent controlled apartments. 
D)  Both answers A and C are correct. 
E)  Both answers B and C are correct.

Question 15

Which of the following decrease the deadweight loss from a rent ceiling set below the equilibrium rent?
i.lowering the ceiling
ii.dedicating more resources to enforcement of the ceiling
iii.raising the ceiling

Accepted Answer

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

Question 16

Why do some workers lose their job when the minimum wage is increased?

Accepted Answer

A)  The increase in labor costs decreases the supply of the product, thereby raising the price of the good so that the equilibrium quantity decreases to zero. 
B)  The increase in the minimum wage decreases the quantity of labor demanded. 
C)  The demand for labor is perfectly inelastic. 
D)  The supply of labor decreases. 
E)  The demand for labor is perfectly elastic. 
A)  The increase in labor costs decreases the supply of the product, thereby raising the price of the good so that the equilibrium quantity decreases to zero. 
B)  The increase in the minimum wage decreases the quantity of labor demanded. 
C)  The demand for labor is perfectly inelastic. 
D)  The supply of labor decreases. 
E)  The demand for labor is perfectly elastic.

Question 17

-The above figure shows the market for DVDs.The government decides that all citizens deserve to watch affordable DVDs so a price ceiling of $12 per DVD is placed on DVDs.After this price ceiling is in effect,producer surplus equals ________.

Accepted Answer

A)  $900,000 
B)  $400,000 
C)  $200,000 
D)  $100,000 
E)  $1,800,000 
A)  $900,000 
B)  $400,000 
C)  $200,000 
D)  $100,000 
E)  $1,800,000

Question 18

-The above figure shows the market for winter jackets.In an effort to keep the nation warm,the president places a price ceiling of $100 in the market for winter jackets.As a result,there is a

Accepted Answer

A)  shortage equal to 150,000 jackets. 
B)  surplus equal to 150,000 jackets. 
C)  surplus equal to 300,000 jackets. 
D)  shortage equal to 250,000 jackets. 
E)  shortage equal to 100,000 jackets. 
A)  shortage equal to 150,000 jackets. 
B)  surplus equal to 150,000 jackets. 
C)  surplus equal to 300,000 jackets. 
D)  shortage equal to 250,000 jackets. 
E)  shortage equal to 100,000 jackets.

Question 19

-The above figure shows the domestic market for wheat.Suppose this market is isolated from global competition and the government intervenes by setting a support price of $15 a ton.The quantity bought by domestic users once the price support is in place is

Accepted Answer

A)  300 million tons. 
B)  400 million tons. 
C)  250 million tons. 
D)  200 million tons. 
E)  100 million tons. 
A)  300 million tons. 
B)  400 million tons. 
C)  250 million tons. 
D)  200 million tons. 
E)  100 million tons.

Question 20

Who are minimum wages designed to help? Do they succeed? What is their effect on society?

Accepted Answer

Minimum wages are designed to improve th

The deadweight loss in a housing market with a rent ceiling set below the equilibrium rent is the

-The above figure shows the domestic market for tomatoes.Suppose this market is isolated from global competition and there is a support price set at $16.In this figure,what area equals the deadweight loss?

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

-The graph shows the market for ski chalets in Aspen.The Aspen Tourist Board asks the local government to impose a rent ceiling on ski chalets.If the rent ceiling is set at $1,900 a week,then there is ________.

-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,the deadweight loss equals ________.

The "fair results" view of fairness says that a minimum wage law set above the equilibrium wage rate is unfair because the minimum wage

A price floor

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

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 subsidy accounts for ________ percent of the farmers' revenue.

When the minimum wage is raised,the union labor .

One result of a minimum wage is

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

Rent controls

Which of the following decrease the deadweight loss from a rent ceiling set below the equilibrium rent? i.lowering the ceiling ii.dedicating more resources to enforcement of the ceiling iii.raising the ceiling

Why do some workers lose their job when the minimum wage is increased?

-The above figure shows the market for DVDs.The government decides that all citizens deserve to watch affordable DVDs so a price ceiling of $12 per DVD is placed on DVDs.After this price ceiling is in effect,producer surplus equals ________.

-The above figure shows the market for winter jackets.In an effort to keep the nation warm,the president places a price ceiling of $100 in the market for winter jackets.As a result,there is a

-The above figure shows the domestic market for wheat.Suppose this market is isolated from global competition and the government intervenes by setting a support price of $15 a ton.The quantity bought by domestic users once the price support is in place is

Who are minimum wages designed to help? Do they succeed? What is their effect on society?

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 deadweight loss in a housing market with a rent ceiling set below the equilibrium rent is the

-The above figure shows the domestic market for tomatoes.Suppose this market is isolated from global competition and there is a support price set at $16.In this figure,what area equals the deadweight loss?

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

-The graph shows the market for ski chalets in Aspen.The Aspen Tourist Board asks the local government to impose a rent ceiling on ski chalets.If the rent ceiling is set at $1,900 a week,then there is ________.

-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,the deadweight loss equals ________.

The "fair results" view of fairness says that a minimum wage law set above the equilibrium wage rate is unfair because the minimum wage

A price floor

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

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 subsidy accounts for ________ percent of the farmers' revenue.

When the minimum wage is raised,the ________ union labor ________.

One result of a minimum wage is

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

Rent controls

Which of the following decrease the deadweight loss from a rent ceiling set below the equilibrium rent? i.lowering the ceiling ii.dedicating more resources to enforcement of the ceiling iii.raising the ceiling

Why do some workers lose their job when the minimum wage is increased?

-The above figure shows the market for DVDs.The government decides that all citizens deserve to watch affordable DVDs so a price ceiling of $12 per DVD is placed on DVDs.After this price ceiling is in effect,producer surplus equals ________.

-The above figure shows the market for winter jackets.In an effort to keep the nation warm,the president places a price ceiling of $100 in the market for winter jackets.As a result,there is a

-The above figure shows the domestic market for wheat.Suppose this market is isolated from global competition and the government intervenes by setting a support price of $15 a ton.The quantity bought by domestic users once the price support is in place is

Who are minimum wages designed to help? Do they succeed? What is their effect on society?

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

When the minimum wage is raised,the union labor .