Question 1

The "fair rules" view of fairness says that one of the reasons a minimum wage is unfair is because it

Accepted Answer

A)  benefits all workers. 
B)  blocks voluntary exchange. 
C)  is imposed by government. 
D)  is below the equilibrium wage rate. 
E)  cannot be enforced. 
A)  benefits all workers. 
B)  blocks voluntary exchange. 
C)  is imposed by government. 
D)  is below the equilibrium wage rate. 
E)  cannot be enforced. B

Question 2

-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.What would be the maximum price someone would pay in the black market?

Accepted Answer

A)  $100 per jacket 
B)  $120 per jacket 
C)  $130 per jacket 
D)  $90 per jacket 
E)  $140 per jacket 
A)  $100 per jacket 
B)  $120 per jacket 
C)  $130 per jacket 
D)  $90 per jacket 
E)  $140 per jacket C

Question 3

Suppose that producers are richer than consumers.Is a price support program fair? Explain your answer.

Accepted Answer

A price support program is unfair.It is unfair under the fair rules approach to fairness because a price support prevents voluntary exchange.And,if producers are richer than consumers,it is unfair under a fair results approach because the price support further enriches the (already rich)producers while decreasing the income of the (already poor)consumers.So in this case a price support redistributes income from the poor to the rich.

Question 4

The surplus created by a price floor will likely be

Accepted Answer

A)  smaller if the good is a necessity. 
B)  larger if the good is addictive. 
C)  smaller if the good is a luxury. 
D)  unaffected by the time that has elapsed since the price ceiling is implemented. 
E)  None of the above answers is correct. 
A)  smaller if the good is a necessity. 
B)  larger if the good is addictive. 
C)  smaller if the good is a luxury. 
D)  unaffected by the time that has elapsed since the price ceiling is implemented. 
E)  None of the above answers is correct.

Question 5

A price support directly sets the

Accepted Answer

A)  amount of production. 
B)  subsidy the government must receive from producers. 
C)  equilibrium quantity. 
D)  lowest price for which the good may be sold. 
E)  highest price for which the good may be sold. 
A)  amount of production. 
B)  subsidy the government must receive from producers. 
C)  equilibrium quantity. 
D)  lowest price for which the good may be sold. 
E)  highest price for which the good may be sold.

Question 6

The figure above shows the supply and demand curves in the market for rental housing. A rent ceiling is set at $400 per month.
-In the figure above,with the rent ceiling

Accepted Answer

A)  there is a shortage of 3,000 units. 
B)  there is a surplus of 3,000 units. 
C)  there is a surplus of 2,000 units. 
D)  there is a shortage of 1,000 units. 
E)  the market is in equilibrium. 
A)  there is a shortage of 3,000 units. 
B)  there is a surplus of 3,000 units. 
C)  there is a surplus of 2,000 units. 
D)  there is a shortage of 1,000 units. 
E)  the market is in equilibrium.

Question 7

-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 8

-The graph shows the labor market for apple pickers in Ohio.If the government sets a minimum wage of $5 an hour,________ apple pickers are unemployed.

Accepted Answer

A)  6,000 
B)  8,000 
C)  10,000 
D)  14,000 
E)  more than 14,000 
A)  6,000 
B)  8,000 
C)  10,000 
D)  14,000 
E)  more than 14,000

Question 9

-The labor demand and labor supply schedules are given in the table above.If a minimum wage of $9 per hour is imposed,

Accepted Answer

A)  a surplus of 300 workers occurs. 
B)  a shortage of 300 workers occurs. 
C)  there is no surplus or shortage of workers. 
D)  the quantity demanded is 1,000 workers. 
E)  there is unemployment of 700 workers. 
A)  a surplus of 300 workers occurs. 
B)  a shortage of 300 workers occurs. 
C)  there is no surplus or shortage of workers. 
D)  the quantity demanded is 1,000 workers. 
E)  there is unemployment of 700 workers.

Question 10

-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 producer surplus?

Accepted Answer

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

Question 11

To keep the price at the level set by a price support,the government must

Accepted Answer

A)  buy some of the good. 
B)  sell some of the good. 
C)  receive a subsidy from the producers. 
D)  insure that imports are readily available. 
E)  be careful to always set the price support below the equilibrium price. 
A)  buy some of the good. 
B)  sell some of the good. 
C)  receive a subsidy from the producers. 
D)  insure that imports are readily available. 
E)  be careful to always set the price support below the equilibrium price.

Question 12

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 number of workers employed is ________,and the wage paid is ________.

Accepted Answer

A)  3,000; $7 per hour 
B)  7,000; $7 per hour 
C)  5,000; $5 per hour 
D)  5,000; $7 per hour 
E)  3,000; $5 per hour 
A)  3,000; $7 per hour 
B)  7,000; $7 per hour 
C)  5,000; $5 per hour 
D)  5,000; $7 per hour 
E)  3,000; $5 per hour

Question 13

Explain why a price floor set below the equilibrium price is ineffective.

Accepted Answer

Price floors are legal minimums; it is l

Question 14

In the market for cotton,suppose the equilibrium price is $10 per ton and the equilibrium quantity is 100 tons.If the government then imposes a price support of $20 per ton,

Accepted Answer

A)  marginal benefit exceeds marginal cost. 
B)  the market becomes more efficient 
C)  marginal cost decreases. 
D)  the government must supply some cotton to offset the shortage that results. 
E)  marginal cost exceeds marginal benefit. 
A)  marginal benefit exceeds marginal cost. 
B)  the market becomes more efficient 
C)  marginal cost decreases. 
D)  the government must supply some cotton to offset the shortage that results. 
E)  marginal cost exceeds marginal benefit.

Question 15

-The above figure shows a labor market.Before the minimum wage of $8 an hour is imposed,employment equals ________ workers; after the minimum wage of $8 an hour is imposed,employment equals ________ workers.

Accepted Answer

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

Question 16

Suppose the current equilibrium wage rate for landscapers is $6.65 in Little Rock; $7.50 in St.Louis and $9.05 in Raleigh.An increase in the minimum wage to $7.50 per hour results in unemployment of landscapers in

Accepted Answer

A)  Little Rock and St. Louis. 
B)  only Raleigh. 
C)  Little Rock, St. Louis, and Raleigh. 
D)  only Little Rock. 
E)  St. Louis and Raleigh. 
A)  Little Rock and St. Louis. 
B)  only Raleigh. 
C)  Little Rock, St. Louis, and Raleigh. 
D)  only Little Rock. 
E)  St. Louis and Raleigh.

Question 17

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 18

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 19

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 20

-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.

The "fair rules" view of fairness says that one of the reasons a minimum wage is unfair is because it

-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.What would be the maximum price someone would pay in the black market?

Suppose that producers are richer than consumers.Is a price support program fair? Explain your answer.

The surplus created by a price floor will likely be

A price support directly sets the

The figure above shows the supply and demand curves in the market for rental housing. A rent ceiling is set at $400 per month. -In the figure above,with the rent ceiling

-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 graph shows the labor market for apple pickers in Ohio.If the government sets a minimum wage of $5 an hour,________ apple pickers are unemployed.

-The labor demand and labor supply schedules are given in the table above.If a minimum wage of $9 per hour is imposed,

-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 producer surplus?

To keep the price at the level set by a price support,the government must

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 number of workers employed is ,and the wage paid is .

Explain why a price floor set below the equilibrium price is ineffective.

In the market for cotton,suppose the equilibrium price is $10 per ton and the equilibrium quantity is 100 tons.If the government then imposes a price support of $20 per ton,

-The above figure shows a labor market.Before the minimum wage of $8 an hour is imposed,employment equals workers; after the minimum wage of $8 an hour is imposed,employment equals workers.

Suppose the current equilibrium wage rate for landscapers is $6.65 in Little Rock; $7.50 in St.Louis and $9.05 in Raleigh.An increase in the minimum wage to $7.50 per hour results in unemployment of landscapers in

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.

If the government imposes an effective ,a deadweight loss .

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

Getting Started

The Usand 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 "fair rules" view of fairness says that one of the reasons a minimum wage is unfair is because it

-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.What would be the maximum price someone would pay in the black market?

Suppose that producers are richer than consumers.Is a price support program fair? Explain your answer.

The surplus created by a price floor will likely be

A price support directly sets the

The figure above shows the supply and demand curves in the market for rental housing. A rent ceiling is set at $400 per month. -In the figure above,with the rent ceiling

-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 graph shows the labor market for apple pickers in Ohio.If the government sets a minimum wage of $5 an hour,________ apple pickers are unemployed.

-The labor demand and labor supply schedules are given in the table above.If a minimum wage of $9 per hour is imposed,

-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 producer surplus?

To keep the price at the level set by a price support,the government must

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 number of workers employed is ________,and the wage paid is ________.

Explain why a price floor set below the equilibrium price is ineffective.

In the market for cotton,suppose the equilibrium price is $10 per ton and the equilibrium quantity is 100 tons.If the government then imposes a price support of $20 per ton,

-The above figure shows a labor market.Before the minimum wage of $8 an hour is imposed,employment equals ________ workers; after the minimum wage of $8 an hour is imposed,employment equals ________ workers.

Suppose the current equilibrium wage rate for landscapers is $6.65 in Little Rock; $7.50 in St.Louis and $9.05 in Raleigh.An increase in the minimum wage to $7.50 per hour results in unemployment of landscapers in

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.

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

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

Getting Started

The Usand 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 supply and demand in the market for labor. The government introduces a minimum wage of $7 per hour. -In the figure above,the number of workers employed is ,and the wage paid is .

-The above figure shows a labor market.Before the minimum wage of $8 an hour is imposed,employment equals workers; after the minimum wage of $8 an hour is imposed,employment equals workers.

If the government imposes an effective ,a deadweight loss .