Question 1

-The graph shows the labor market for teenagers in Atlanta.If the government sets a minimum wage of $6 an hour,the number of teenagers employed is ________.

Accepted Answer

A)  7,000 
B)  5,000 
C)  4,000 
D)  3,000 
E)  less than 3,000 
A)  7,000 
B)  5,000 
C)  4,000 
D)  3,000 
E)  less than 3,000

Question 2

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

Accepted Answer

A)  quantity supplied of milk falls short of the quantity demanded. 
B)  quantity supplied of milk exceeds the quantity demanded. 
C)  supply increases. 
D)  demand decreases. 
E)  price of milk remains $4 per gallon. 
A)  quantity supplied of milk falls short of the quantity demanded. 
B)  quantity supplied of milk exceeds the quantity demanded. 
C)  supply increases. 
D)  demand decreases. 
E)  price of milk remains $4 per gallon.

Question 3

If a price ceiling is introduced in the market for milk below the market equilibrium price,then the producer surplus made by dairy farmers ________.

Accepted Answer

A)  will increase 
B)  will decrease 
C)  will not change 
D)  might increase or decrease depending on whether the demand for milk increases or decreases 
E)  might increase or decrease depending on whether the supply of milk decreases or increases 
A)  will increase 
B)  will decrease 
C)  will not change 
D)  might increase or decrease depending on whether the demand for milk increases or decreases 
E)  might increase or decrease depending on whether the supply of milk decreases or increases

Question 4

A minimum wage increases unemployment by

Accepted Answer

A)  increasing the quantity of labor demanded. 
B)  decreasing the quantity of labor demanded. 
C)  shifting only the labor supply curve rightward. 
D)  shifting only the labor demand curve leftward. 
E)  shifting the labor supply curve rightward and shifting the labor demand curve leftward. 
A)  increasing the quantity of labor demanded. 
B)  decreasing the quantity of labor demanded. 
C)  shifting only the labor supply curve rightward. 
D)  shifting only the labor demand curve leftward. 
E)  shifting the labor supply curve rightward and shifting the labor demand curve leftward.

Question 5

-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 quantity demanded is equal to the quantity supplied. 
B)  With a price ceiling of $3.00 per bagel, the quantity demanded is greater than the quantity supplied. 
C)  With a price ceiling of $1.00 per bagel, there is a shortage of bagels. 
D)  Answers A and B are correct. 
E)  Answers B and C are correct. 
A)  With a price ceiling of $1.00 per bagel, the quantity demanded is equal to the quantity supplied. 
B)  With a price ceiling of $3.00 per bagel, the quantity demanded is greater than the quantity supplied. 
C)  With a price ceiling of $1.00 per bagel, there is a shortage of bagels. 
D)  Answers A and B are correct. 
E)  Answers B and C are correct.

Question 6

To have an effective price support program,the government must
i.isolate the domestic market from the world market.
ii.pay the farmers a subsidy.
iii.introduce a price floor.

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 7

A rent ceiling below the equilibrium rent

Accepted Answer

A)  increases the quantity of housing supplied. 
B)  is an example of a price floor. 
C)  has no effect on the housing market because the ceiling is below the equilibrium. 
D)  can create a black market. 
E)  limits search because people need no longer search for cheap apartments. 
A)  increases the quantity of housing supplied. 
B)  is an example of a price floor. 
C)  has no effect on the housing market because the ceiling is below the equilibrium. 
D)  can create a black market. 
E)  limits search because people need no longer search for cheap apartments.

Question 8

A rent ceiling is

Accepted Answer

A)  fair, because it helps all renters. 
B)  fair, because it insures that low-income families can rent apartments. 
C)  fair, because it helps all landlords. 
D)  unfair. 
E)  fair, because it helps more renters than it harms. 
A)  fair, because it helps all renters. 
B)  fair, because it insures that low-income families can rent apartments. 
C)  fair, because it helps all landlords. 
D)  unfair. 
E)  fair, because it helps more renters than it harms.

Question 9

The people who immediately benefit from a minimum wage are

Accepted Answer

A)  employers who now pay the minimum wage. 
B)  those people who enter the labor force to search for minimum wage jobs. 
C)  the workers who retain their jobs after enactment of the minimum wage. 
D)  everyone, both demanders and suppliers, because the minimum wage benefits everyone. 
E)  all workers. 
A)  employers who now pay the minimum wage. 
B)  those people who enter the labor force to search for minimum wage jobs. 
C)  the workers who retain their jobs after enactment of the minimum wage. 
D)  everyone, both demanders and suppliers, because the minimum wage benefits everyone. 
E)  all workers.

Question 10

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

Question 11

Which of the following is true?
i.A price support is inefficient.
ii.A price floor set above the equilibrium price creates a surplus.
iii.A price ceiling set above the equilibrium price creates a black market.

Accepted Answer

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

Question 12

Rent ceilings set below the equilibrium rent
i.create a deadweight loss.
ii.increase search activity.
iii.encourage landlords to charge a high price for new locks and keys,called "key money."

Accepted Answer

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

Question 13

How does the elasticity of demand for labor affect the deadweight loss from an increase in the minimum wage? Why?

Accepted Answer

The more elastic the demand for labor,th

Question 14

-The figure above shows the labor market in a region.For a minimum wage to change the wage rate and amount of employment,it must be

Accepted Answer

A)  left to the forces of supply and demand. 
B)  set above $6 an hour. 
C)  set equal to $6 an hour. 
D)  set below $6 an hour. 
E)  set at $12 per hour. 
A)  left to the forces of supply and demand. 
B)  set above $6 an hour. 
C)  set equal to $6 an hour. 
D)  set below $6 an hour. 
E)  set at $12 per hour.

Question 15

A stated goal of a minimum wage is to

Accepted Answer

A)  increase government tax revenue. 
B)  stabilize production costs. 
C)  boost the incomes of low-wage earners. 
D)  decrease business profits. 
E)  increase business profits by making the labor market more efficient. 
A)  increase government tax revenue. 
B)  stabilize production costs. 
C)  boost the incomes of low-wage earners. 
D)  decrease business profits. 
E)  increase business profits by making the labor market more efficient.

Question 16

A minimum wage set above the equilibrium wage rate creates

Accepted Answer

A)  efficiency because it increases most workers' wages. 
B)  efficiency because few workers lose their jobs. 
C)  efficiency because workers can earn a living wage. 
D)  inefficiency and a deadweight loss. 
E)  inefficiency because it creates excessive employment. 
A)  efficiency because it increases most workers' wages. 
B)  efficiency because few workers lose their jobs. 
C)  efficiency because workers can earn a living wage. 
D)  inefficiency and a deadweight loss. 
E)  inefficiency because it creates excessive employment.

Question 17

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 18

People who benefit from a rent ceiling include

Accepted Answer

A)  all landlords. 
B)  taxpayers. 
C)  tenants who have a rent-controlled apartment. 
D)  potential tenants, that is, people looking for apartments. 
E)  all landlords and some tenants. 
A)  all landlords. 
B)  taxpayers. 
C)  tenants who have a rent-controlled apartment. 
D)  potential tenants, that is, people looking for apartments. 
E)  all landlords and some tenants.

Question 19

A minimum wage set above the equilibrium wage rate

Accepted Answer

A)  increases the quantity of labor services supplied. 
B)  decreases the quantity of labor services supplied. 
C)  has no effect on the quantity of labor services supplied. 
D)  shifts the labor supply curve rightward. 
E)  shifts the labor supply curve leftward. 
A)  increases the quantity of labor services supplied. 
B)  decreases the quantity of labor services supplied. 
C)  has no effect on the quantity of labor services supplied. 
D)  shifts the labor supply curve rightward. 
E)  shifts the labor supply curve leftward.

Question 20

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 quantity of housing supplied is ________ units,the quantity demanded is ________ units,and the quantity rented is ________ units.

Accepted Answer

A)  3,000; 6,000; 3,000 
B)  3,000; 6,000; 6,000 
C)  3,000; 6,000; 4,000 
D)  3,000; 3,000; 3,000 
E)  4,000; 4,000; 4,000 
A)  3,000; 6,000; 3,000 
B)  3,000; 6,000; 6,000 
C)  3,000; 6,000; 4,000 
D)  3,000; 3,000; 3,000 
E)  4,000; 4,000; 4,000

-The graph shows the labor market for teenagers in Atlanta.If the government sets a minimum wage of $6 an hour,the number of teenagers employed is ________.

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

If a price ceiling is introduced in the market for milk below the market equilibrium price,then the producer surplus made by dairy farmers ________.

A minimum wage increases unemployment by

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

To have an effective price support program,the government must i.isolate the domestic market from the world market. ii.pay the farmers a subsidy. iii.introduce a price floor.

A rent ceiling below the equilibrium rent

A rent ceiling is

The people who immediately benefit from a minimum wage are

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

Which of the following is true? i.A price support is inefficient. ii.A price floor set above the equilibrium price creates a surplus. iii.A price ceiling set above the equilibrium price creates a black market.

Rent ceilings set below the equilibrium rent i.create a deadweight loss. ii.increase search activity. iii.encourage landlords to charge a high price for new locks and keys,called "key money."

How does the elasticity of demand for labor affect the deadweight loss from an increase in the minimum wage? Why?

-The figure above shows the labor market in a region.For a minimum wage to change the wage rate and amount of employment,it must be

A stated goal of a minimum wage is to

A minimum wage set above the equilibrium wage rate creates

A price floor is

People who benefit from a rent ceiling include

A minimum wage set above the equilibrium wage rate

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 quantity of housing supplied is units,the quantity demanded is units,and the quantity rented is units.

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 graph shows the labor market for teenagers in Atlanta.If the government sets a minimum wage of $6 an hour,the number of teenagers employed is ________.

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

If a price ceiling is introduced in the market for milk below the market equilibrium price,then the producer surplus made by dairy farmers ________.

A minimum wage increases unemployment by

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

To have an effective price support program,the government must i.isolate the domestic market from the world market. ii.pay the farmers a subsidy. iii.introduce a price floor.

A rent ceiling below the equilibrium rent

A rent ceiling is

The people who immediately benefit from a minimum wage are

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

Which of the following is true? i.A price support is inefficient. ii.A price floor set above the equilibrium price creates a surplus. iii.A price ceiling set above the equilibrium price creates a black market.

Rent ceilings set below the equilibrium rent i.create a deadweight loss. ii.increase search activity. iii.encourage landlords to charge a high price for new locks and keys,called "key money."

How does the elasticity of demand for labor affect the deadweight loss from an increase in the minimum wage? Why?

-The figure above shows the labor market in a region.For a minimum wage to change the wage rate and amount of employment,it must be

A stated goal of a minimum wage is to

A minimum wage set above the equilibrium wage rate creates

A price floor is

People who benefit from a rent ceiling include

A minimum wage set above the equilibrium wage rate

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