Question 1

A price floor in an agricultural market is called

Accepted Answer

A)  an agricultural floor. 
B)  a farm support. 
C)  a price support. 
D)  a farm subsidy. 
E)  a farm support price. 
A)  an agricultural floor. 
B)  a farm support. 
C)  a price support. 
D)  a farm subsidy. 
E)  a farm support price.

Question 2

What is a price support program in an agricultural market? Explain its impact on a market.

Accepted Answer

A price support program is essentially a

Question 3

Import restriction in advanced economies deny developing economies access to the food market of the advanced economies.The result is ________ price and ________ farm production in the developing economies.

Accepted Answer

A)  lower; larger 
B)  lower; smaller 
C)  higher; smaller 
D)  higher; larger 
E)  stable; smaller 
A)  lower; larger 
B)  lower; smaller 
C)  higher; smaller 
D)  higher; larger 
E)  stable; smaller

Question 4

Why do rent ceilings lead to shortages and black markets?

Accepted Answer

Rent ceilings that are set below the mar

Question 5

When a minimum wage is introduced ________ the equilibrium wage rate,the quantity of labor demanded ________ and the quantity of labor supplied ________,thus creating unemployment.

Accepted Answer

A)  above; increases; decreases 
B)  below; increases; decreases 
C)  above; decreases; increases 
D)  above; decreases; decreases 
E)  below; decreases; decreases 
A)  above; increases; decreases 
B)  below; increases; decreases 
C)  above; decreases; increases 
D)  above; decreases; decreases 
E)  below; decreases; decreases

Question 6

In the labor market,as wages rise,households

Accepted Answer

A)  decrease the quantity of labor supplied. 
B)  increase the quantity of labor supplied. 
C)  decrease the quantity of labor demanded. 
D)  increase the quantity of labor demanded. 
E)  increase the supply of labor. 
A)  decrease the quantity of labor supplied. 
B)  increase the quantity of labor supplied. 
C)  decrease the quantity of labor demanded. 
D)  increase the quantity of labor demanded. 
E)  increase the supply of labor.

Question 7

-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,deadweight loss equals ________.

Accepted Answer

A)  $1,600,000 
B)  $200,000 
C)  $800,000 
D)  $1,800,000 
E)  $400,000 
A)  $1,600,000 
B)  $200,000 
C)  $800,000 
D)  $1,800,000 
E)  $400,000

Question 8

If a rent ceiling is imposed that is less than the equilibrium rent,which of the following outcomes is most likely to occur?

Accepted Answer

A)  reduced search activity 
B)  black market activity 
C)  a building boom 
D)  a housing surplus 
E)  None of the above answers is correct because to have an impact, the rent ceiling must be above the equilibrium rent. 
A)  reduced search activity 
B)  black market activity 
C)  a building boom 
D)  a housing surplus 
E)  None of the above answers is correct because to have an impact, the rent ceiling must be above the equilibrium rent.

Question 9

With a rent ceiling set below the equilibrium rent,
i.all renters are able to rent apartments at a lower rent.
ii.there is a shortage of apartments.
iii.the quantity of apartments supplied does not change because buildings cannot be moved.

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 10

-The figure above shows the labor market in a region.If a minimum wage of $8 an hour is imposed,then the quantity of labor supplied is ________ and the quantity of labor demanded is ________.

Accepted Answer

A)  60,000; 60,000 
B)  80,000; 40,000 
C)  40,000; 60,000 
D)  60,000; 40,000 
E)  40,000; 40,000 
A)  60,000; 60,000 
B)  80,000; 40,000 
C)  40,000; 60,000 
D)  60,000; 40,000 
E)  40,000; 40,000

Question 11

-The graph shows the labor market for teenagers in Atlanta.If the government sets a minimum wage of $6 an hour,then the maximum amount that a teenager would be willing to spend on job search is ________ an hour.

Accepted Answer

A)  $2 
B)  $4 
C)  $5 
D)  $6 
E)  $3 
A)  $2 
B)  $4 
C)  $5 
D)  $6 
E)  $3

Question 12

A price floor set above the equilibrium price

Accepted Answer

A)  creates a surplus. 
B)  creates a shortage. 
C)  creates excess demand. 
D)  balances supply and demand. 
E)  has no effect. 
A)  creates a surplus. 
B)  creates a shortage. 
C)  creates excess demand. 
D)  balances supply and demand. 
E)  has no effect.

Question 13

-The graph shows the market for ski chalets in Aspen.If a rent ceiling is set at $1,900 a week,then the maximum amount charged in the black market is ________ a week.

Accepted Answer

A)  $1,900 
B)  $2,050 
C)  $2,125 
D)  $225 
E)  $150 
A)  $1,900 
B)  $2,050 
C)  $2,125 
D)  $225 
E)  $150

Question 14

Which of the following describes a difference between a price support and a price ceiling?

Accepted Answer

A)  A price support creates a deadweight loss while a price ceiling does not. 
B)  A price ceiling is a regulated price while a price support is a regulated quantity. 
C)  A price support decreases the quantity while a price ceiling does not. 
D)  A price ceiling increases the price above the equilibrium price while a price support does not. 
E)  A price support attempts to raise the price above the equilibrium price while a price ceiling does not. 
A)  A price support creates a deadweight loss while a price ceiling does not. 
B)  A price ceiling is a regulated price while a price support is a regulated quantity. 
C)  A price support decreases the quantity while a price ceiling does not. 
D)  A price ceiling increases the price above the equilibrium price while a price support does not. 
E)  A price support attempts to raise the price above the equilibrium price while a price ceiling does not.

Question 15

-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 then there is a

Accepted Answer

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

Question 16

In a housing market with a rent ceiling below the equilibrium rent,apartment seekers spend more time searching for an apartment than they would in a housing market without a rent ceiling.Why does this difference exist?

Accepted Answer

A)  In the market with the rent ceiling, renters are searching for the best buy in apartments. 
B)  In the market with the rent ceiling, there is a wide variety in the quality of apartments for rent. 
C)  In the market with the rent ceiling, the quantity of housing demanded is greater than quantity supplied at the ceiling price. 
D)  The premise of the question is incorrect because people spend less time searching with a rent ceiling since they no longer need to look for a low-priced apartment. 
E)  The premise of the question is incorrect because there is no difference in the search time between a market with a rent ceiling and one without a ceiling. 
A)  In the market with the rent ceiling, renters are searching for the best buy in apartments. 
B)  In the market with the rent ceiling, there is a wide variety in the quality of apartments for rent. 
C)  In the market with the rent ceiling, the quantity of housing demanded is greater than quantity supplied at the ceiling price. 
D)  The premise of the question is incorrect because people spend less time searching with a rent ceiling since they no longer need to look for a low-priced apartment. 
E)  The premise of the question is incorrect because there is no difference in the search time between a market with a rent ceiling and one without a ceiling.

Question 17

Suppose the equilibrium wage rate for apricot pickers is $9.00 per hour in California and at that wage rate the equilibrium quantity of apricot pickers is 14,000.If the minimum wage is set at $7.50 per hour,then the

Accepted Answer

A)  quantity of apricot pickers employed increases. 
B)  quantity of apricot pickers employed decreases. 
C)  quantity of apricot pickers employed does not change. 
D)  wage rate for apricot pickers increases. 
E)  some apricot pickers are unemployed. 
A)  quantity of apricot pickers employed increases. 
B)  quantity of apricot pickers employed decreases. 
C)  quantity of apricot pickers employed does not change. 
D)  wage rate for apricot pickers increases. 
E)  some apricot pickers are unemployed.

Question 18

A rent ceiling set below the equilibrium rent

Accepted Answer

A)  ensures the availability of enough low-rent apartments in a city. 
B)  results in all renters and potential renters being better off. 
C)  creates a situation in which the quantity demanded of housing is greater than quantity supplied. 
D)  ensures that landlords earn a reasonable rate of profit on apartments. 
E)  eliminates discrimination by landlords. 
A)  ensures the availability of enough low-rent apartments in a city. 
B)  results in all renters and potential renters being better off. 
C)  creates a situation in which the quantity demanded of housing is greater than quantity supplied. 
D)  ensures that landlords earn a reasonable rate of profit on apartments. 
E)  eliminates discrimination by landlords.

Question 19

If an apartment owner charged ________ than a specified rent for housing,the government ________ impose a rent ceiling.

Accepted Answer

A)  more; can 
B)  more; cannot 
C)  less; can 
D)  less; cannot 
E)  less; might 
A)  more; can 
B)  more; cannot 
C)  less; can 
D)  less; cannot 
E)  less; might

Question 20

A price ceiling is a government regulation that makes it illegal to charge a price

Accepted Answer

A)  below the equilibrium price. 
B)  above the equilibrium price. 
C)  for a good or service. 
D)  above some specified level. 
E)  below some specified level. 
A)  below the equilibrium price. 
B)  above the equilibrium price. 
C)  for a good or service. 
D)  above some specified level. 
E)  below some specified level.

A price floor in an agricultural market is called

What is a price support program in an agricultural market? Explain its impact on a market.

Import restriction in advanced economies deny developing economies access to the food market of the advanced economies.The result is price and farm production in the developing economies.

Why do rent ceilings lead to shortages and black markets?

When a minimum wage is introduced the equilibrium wage rate,the quantity of labor demanded and the quantity of labor supplied ,thus creating unemployment.

In the labor market,as wages rise,households

-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,deadweight loss equals ________.

If a rent ceiling is imposed that is less than the equilibrium rent,which of the following outcomes is most likely to occur?

With a rent ceiling set below the equilibrium rent, i.all renters are able to rent apartments at a lower rent. ii.there is a shortage of apartments. iii.the quantity of apartments supplied does not change because buildings cannot be moved.

-The figure above shows the labor market in a region.If a minimum wage of $8 an hour is imposed,then the quantity of labor supplied is and the quantity of labor demanded is .

-The graph shows the labor market for teenagers in Atlanta.If the government sets a minimum wage of $6 an hour,then the maximum amount that a teenager would be willing to spend on job search is ________ an hour.

A price floor set above the equilibrium price

-The graph shows the market for ski chalets in Aspen.If a rent ceiling is set at $1,900 a week,then the maximum amount charged in the black market is ________ a week.

Which of the following describes a difference between a price support and a price ceiling?

-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 then there is a

In a housing market with a rent ceiling below the equilibrium rent,apartment seekers spend more time searching for an apartment than they would in a housing market without a rent ceiling.Why does this difference exist?

Suppose the equilibrium wage rate for apricot pickers is $9.00 per hour in California and at that wage rate the equilibrium quantity of apricot pickers is 14,000.If the minimum wage is set at $7.50 per hour,then the

A rent ceiling set below the equilibrium rent

If an apartment owner charged than a specified rent for housing,the government impose a rent ceiling.

A price ceiling is a government regulation that makes it illegal to charge a price

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 price floor in an agricultural market is called

What is a price support program in an agricultural market? Explain its impact on a market.

Import restriction in advanced economies deny developing economies access to the food market of the advanced economies.The result is ________ price and ________ farm production in the developing economies.

Why do rent ceilings lead to shortages and black markets?

When a minimum wage is introduced ________ the equilibrium wage rate,the quantity of labor demanded ________ and the quantity of labor supplied ________,thus creating unemployment.

In the labor market,as wages rise,households

-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,deadweight loss equals ________.

If a rent ceiling is imposed that is less than the equilibrium rent,which of the following outcomes is most likely to occur?

With a rent ceiling set below the equilibrium rent, i.all renters are able to rent apartments at a lower rent. ii.there is a shortage of apartments. iii.the quantity of apartments supplied does not change because buildings cannot be moved.

-The figure above shows the labor market in a region.If a minimum wage of $8 an hour is imposed,then the quantity of labor supplied is ________ and the quantity of labor demanded is ________.

-The graph shows the labor market for teenagers in Atlanta.If the government sets a minimum wage of $6 an hour,then the maximum amount that a teenager would be willing to spend on job search is ________ an hour.

A price floor set above the equilibrium price

-The graph shows the market for ski chalets in Aspen.If a rent ceiling is set at $1,900 a week,then the maximum amount charged in the black market is ________ a week.

Which of the following describes a difference between a price support and a price ceiling?

-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 then there is a

In a housing market with a rent ceiling below the equilibrium rent,apartment seekers spend more time searching for an apartment than they would in a housing market without a rent ceiling.Why does this difference exist?

Suppose the equilibrium wage rate for apricot pickers is $9.00 per hour in California and at that wage rate the equilibrium quantity of apricot pickers is 14,000.If the minimum wage is set at $7.50 per hour,then the

A rent ceiling set below the equilibrium rent

If an apartment owner charged ________ than a specified rent for housing,the government ________ impose a rent ceiling.

A price ceiling is a government regulation that makes it illegal to charge a price

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

Import restriction in advanced economies deny developing economies access to the food market of the advanced economies.The result is price and farm production in the developing economies.

When a minimum wage is introduced the equilibrium wage rate,the quantity of labor demanded and the quantity of labor supplied ,thus creating unemployment.

-The figure above shows the labor market in a region.If a minimum wage of $8 an hour is imposed,then the quantity of labor supplied is and the quantity of labor demanded is .

If an apartment owner charged than a specified rent for housing,the government impose a rent ceiling.