Question 1

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 2

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 3

Why would an increase in the minimum wage to $15 per hour lead to more unemployment for teenage and low-skilled workers?

Accepted Answer

Many teenage and low-skilled workers ear

Question 4

-The above figure shows a labor market with minimum wage equal to $16.In this figure,what area equals the resources lost because of job search?

Accepted Answer

A)  area A 
B)  area B 
C)  area C 
D)  area D 
E)  area E 
A)  area A 
B)  area B 
C)  area C 
D)  area D 
E)  area E

Question 5

When a rent ceiling below the equilibrium rent is put in place,the outcome is

Accepted Answer

A)  efficient because marginal benefit equals marginal cost. 
B)  inefficient because marginal benefit equals marginal cost. 
C)  inefficient because marginal benefit is greater than marginal cost. 
D)  inefficient because marginal benefit is less than marginal cost. 
E)  efficient because marginal benefit is greater than marginal cost. 
A)  efficient because marginal benefit equals marginal cost. 
B)  inefficient because marginal benefit equals marginal cost. 
C)  inefficient because marginal benefit is greater than marginal cost. 
D)  inefficient because marginal benefit is less than marginal cost. 
E)  efficient because marginal benefit is greater than marginal cost.

Question 6

One result of the minimum wage is

Accepted Answer

A)  a black market for labor that pays more than the minimum wage. 
B)  a black market for labor that pays less than the minimum wage. 
C)  decreased job search activity. 
D)  a decrease in unemployment among poor and unskilled workers. 
E)  an increase in employment among poor and unskilled workers. 
A)  a black market for labor that pays more than the minimum wage. 
B)  a black market for labor that pays less than the minimum wage. 
C)  decreased job search activity. 
D)  a decrease in unemployment among poor and unskilled workers. 
E)  an increase in employment among poor and unskilled workers.

Question 7

A black market

Accepted Answer

A)  is legal only when it is associated with government price ceilings. 
B)  is defined as the deadweight loss associated with taxes. 
C)  benefits no one. 
D)  is a potential outcome of a price ceiling. 
E)  is always legal. 
A)  is legal only when it is associated with government price ceilings. 
B)  is defined as the deadweight loss associated with taxes. 
C)  benefits no one. 
D)  is a potential outcome of a price ceiling. 
E)  is always legal.

Question 8

A price support set above the equilibrium price does which of the following?
i.decreases producer surplus
ii.decreases consumer surplus
iii.decreases the marginal cost of the last unit produced

Accepted Answer

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

Question 9

-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,what is the maximum rent someone is willing to pay in the black market?

Accepted Answer

A)  $1,300 per month 
B)  $1,000 per month 
C)  $900 per month 
D)  $1,100 per month 
E)  $1,400 per month 
A)  $1,300 per month 
B)  $1,000 per month 
C)  $900 per month 
D)  $1,100 per month 
E)  $1,400 per month

Question 10

-The above figure shows a housing market with a rent ceiling equal to $1,000.In this figure,what area is equal to the resources lost due to search?

Accepted Answer

A)  area A 
B)  area B 
C)  area C 
D)  area D 
E)  area E 
A)  area A 
B)  area B 
C)  area C 
D)  area D 
E)  area E

Question 11

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 12

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 13

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 to make the price support work,the government buys ________ million tons of sugar beets.

Accepted Answer

A)  10 
B)  20 
C)  30 
D)  5 
E)  15 
A)  10 
B)  20 
C)  30 
D)  5 
E)  15

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)  the market price increases. 
B)  the market price decreases. 
C)  marginal cost decreases. 
D)  consumer surplus increases. 
E)  the deadweight loss is decreased. 
A)  the market price increases. 
B)  the market price decreases. 
C)  marginal cost decreases. 
D)  consumer surplus increases. 
E)  the deadweight loss is decreased.

Question 15

One of the consequences of a rent ceiling set below the equilibrium rent is

Accepted Answer

A)  decreased search activity. 
B)  increased search activity. 
C)  the establishment of landlord unions. 
D)  surpluses of apartments. 
E)  the elimination of the deadweight loss that would otherwise exist in the housing market. 
A)  decreased search activity. 
B)  increased search activity. 
C)  the establishment of landlord unions. 
D)  surpluses of apartments. 
E)  the elimination of the deadweight loss that would otherwise exist in the housing market.

Question 16

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 17

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 $5 per ton,

Accepted Answer

A)  a deadweight loss is created. 
B)  the market becomes more efficient. 
C)  consumer surplus increases. 
D)  producers' economic profits increase. 
E)  None of the above answers is correct. 
A)  a deadweight loss is created. 
B)  the market becomes more efficient. 
C)  consumer surplus increases. 
D)  producers' economic profits increase. 
E)  None of the above answers is correct.

Question 18

-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 19

-The figure above illustrates the bagel market.Which of the following statements is correct?

Accepted Answer

A)  With a price ceiling of $1.00 per bagel, the price of a bagel is $1. 
B)  With a price ceiling of $3.00 per bagel, the price of a bagel is $2. 
C)  With no government intervention, the equilibrium price of a bagel is $2. 
D)  Only answers A and B are correct. 
E)  Answers A, B, and C are correct. 
A)  With a price ceiling of $1.00 per bagel, the price of a bagel is $1. 
B)  With a price ceiling of $3.00 per bagel, the price of a bagel is $2. 
C)  With no government intervention, the equilibrium price of a bagel is $2. 
D)  Only answers A and B are correct. 
E)  Answers A, B, and C are correct.

Question 20

-The graph shows the market for rental housing in Little Rock.The market for apartments is efficient when ________.

Accepted Answer

A)  the quantity of apartments demanded is 12,000 a month 
B)  the rent ceiling is set at $300 a month 
C)  there is no rent ceiling 
D)  the quantity of apartments supplied is 6,000 a month 
E)  the rent charged is less than $450 
A)  the quantity of apartments demanded is 12,000 a month 
B)  the rent ceiling is set at $300 a month 
C)  there is no rent ceiling 
D)  the quantity of apartments supplied is 6,000 a month 
E)  the rent charged is less than $450

A price ceiling

A price floor set above the equilibrium price

Why would an increase in the minimum wage to $15 per hour lead to more unemployment for teenage and low-skilled workers?

-The above figure shows a labor market with minimum wage equal to $16.In this figure,what area equals the resources lost because of job search?

When a rent ceiling below the equilibrium rent is put in place,the outcome is

One result of the minimum wage is

A black market

A price support set above the equilibrium price does which of the following? i.decreases producer surplus ii.decreases consumer surplus iii.decreases the marginal cost of the last unit produced

-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,what is the maximum rent someone is willing to pay in the black market?

-The above figure shows a housing market with a rent ceiling equal to $1,000.In this figure,what area is equal to the resources lost due to search?

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 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.

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 to make the price support work,the government buys ________ million tons of sugar beets.

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,

One of the consequences of a rent ceiling set below the equilibrium rent is

Producers favor a because .

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 $5 per ton,

-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

-The figure above illustrates the bagel market.Which of the following statements is correct?

-The graph shows the market for rental housing in Little Rock.The market for apartments is efficient when ________.

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

A price ceiling

A price floor set above the equilibrium price

Why would an increase in the minimum wage to $15 per hour lead to more unemployment for teenage and low-skilled workers?

-The above figure shows a labor market with minimum wage equal to $16.In this figure,what area equals the resources lost because of job search?

When a rent ceiling below the equilibrium rent is put in place,the outcome is

One result of the minimum wage is

A black market

A price support set above the equilibrium price does which of the following? i.decreases producer surplus ii.decreases consumer surplus iii.decreases the marginal cost of the last unit produced

-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,what is the maximum rent someone is willing to pay in the black market?

-The above figure shows a housing market with a rent ceiling equal to $1,000.In this figure,what area is equal to the resources lost due to search?

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 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.

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 to make the price support work,the government buys ________ million tons of sugar beets.

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,

One of the consequences of a rent ceiling set below the equilibrium rent is

Producers favor a ________ because ________.

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 $5 per ton,

-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

-The figure above illustrates the bagel market.Which of the following statements is correct?

-The graph shows the market for rental housing in Little Rock.The market for apartments is efficient when ________.

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 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.

Producers favor a because .