Question 1

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

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 2

-The above figure shows a labor market with a minimum wage of $8 an hour.The deadweight loss equals the

Accepted Answer

A)  area abc. 
B)  distance ab. 
C)  distance ad. 
D)  area bad. 
E)  area acd. 
A)  area abc. 
B)  distance ab. 
C)  distance ad. 
D)  area bad. 
E)  area acd.

Question 3

To be effective in raising people's wages,a minimum wage must be set

Accepted Answer

A)  above the equilibrium wage rate. 
B)  below the equilibrium wage rate. 
C)  equal to the equilibrium wage rate. 
D)  below $7. 
E)  either above or below the equilibrium wage depending on whether the supply curve of labor shifts rightward or leftward in response to the minimum wage. 
A)  above the equilibrium wage rate. 
B)  below the equilibrium wage rate. 
C)  equal to the equilibrium wage rate. 
D)  below $7. 
E)  either above or below the equilibrium wage depending on whether the supply curve of labor shifts rightward or leftward in response to the minimum wage.

Question 4

A rent ceiling set below the equilibrium rent decreases the quantity of housing supplied because

Accepted Answer

A)  landlords of previously barely profitable apartments refuse to rent them. 
B)  the supply of housing increases. 
C)  fewer tenants will search for housing. 
D)  demand for housing will increase. 
E)  the supply curve of housing immediately shifts leftward. 
A)  landlords of previously barely profitable apartments refuse to rent them. 
B)  the supply of housing increases. 
C)  fewer tenants will search for housing. 
D)  demand for housing will increase. 
E)  the supply curve of housing immediately shifts leftward.

Question 5

If the minimum wage is above the equilibrium wage rate,then an increase in the minimum wage ________ employment and ________ unemployment.

Accepted Answer

A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases 
E)  does not change; increases 
A)  increases; increases 
B)  increases; decreases 
C)  decreases; increases 
D)  decreases; decreases 
E)  does not change; increases

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 firms' surplus equals ________.

Accepted Answer

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

Question 7

-The graph shows the labor market for painters.The lower the wage rate,the ________ is the quantity of painters that firms demand and the ________ is the quantity of painters that households are willing to supply.

Accepted Answer

A)  greater; smaller 
B)  greater; greater 
C)  smaller; greater 
D)  smaller; smaller 
E)  None of the above answers is correct because both the demand and supply curves will shift in response to the change in the wage rate. 
A)  greater; smaller 
B)  greater; greater 
C)  smaller; greater 
D)  smaller; smaller 
E)  None of the above answers is correct because both the demand and supply curves will shift in response to the change in the wage rate.

Question 8

If a minimum wage is introduced that is above the equilibrium wage rate,

Accepted Answer

A)  the quantity of labor demanded increases. 
B)  job search activity increases. 
C)  the supply of labor increases and the supply of labor curve shifts rightward. 
D)  unemployment decreases because more workers accept jobs at the higher minimum wage rate. 
E)  the quantity of labor supplied decreases because of the increase in unemployment. 
A)  the quantity of labor demanded increases. 
B)  job search activity increases. 
C)  the supply of labor increases and the supply of labor curve shifts rightward. 
D)  unemployment decreases because more workers accept jobs at the higher minimum wage rate. 
E)  the quantity of labor supplied decreases because of the increase in unemployment.

Question 9

-The graph shows the market for holiday condos in West Palm Beach.The equilibrium rent is ________ a week.

Accepted Answer

A)  any amount less than $1,550 
B)  any amount greater than $1,550 
C)  $1,550 
D)  $4,000 
E)  None of the above answers is correct. 
A)  any amount less than $1,550 
B)  any amount greater than $1,550 
C)  $1,550 
D)  $4,000 
E)  None of the above answers is correct.

Question 10

Will an increase in the minimum wage create more unemployment if the supply and demand for labor are highly elastic or highly inelastic?

Accepted Answer

An increase in the minimum wage creates

Question 11

Explain why in cities such as New York City that have rent ceiling laws,so many people who work in the city commute from outside the city.

Accepted Answer

Rent ceilings decrease the quantity supp

Question 12

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 13

Suppose the current equilibrium wage rate for housekeepers is $8.60 per hour.An increase in the minimum wage to $7.50 per hour leads to

Accepted Answer

A)  a surplus of housekeepers. 
B)  a shortage of housekeepers. 
C)  no change in the market for housekeepers. 
D)  an increase in the quantity of housekeepers supplied. 
E)  unemployment of housekeepers. 
A)  a surplus of housekeepers. 
B)  a shortage of housekeepers. 
C)  no change in the market for housekeepers. 
D)  an increase in the quantity of housekeepers supplied. 
E)  unemployment of housekeepers.

Question 14

-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 15

In order to have an impact,a ________ must be set below the equilibrium price and when this occurs,________.

Accepted Answer

A)  price ceiling; consumer surplus increases 
B)  price floor; consumer surplus decreases 
C)  price ceiling; producer surplus decreases 
D)  price support; total revenue increases 
E)  price support; consumer surplus increases 
A)  price ceiling; consumer surplus increases 
B)  price floor; consumer surplus decreases 
C)  price ceiling; producer surplus decreases 
D)  price support; total revenue increases 
E)  price support; consumer surplus increases

Question 16

An illegal market in which the price exceeds a legally imposed price ceiling is called a

Accepted Answer

A)  shortage market. 
B)  surplus market. 
C)  black market. 
D)  fair market. 
E)  subsidized market. 
A)  shortage market. 
B)  surplus market. 
C)  black market. 
D)  fair market. 
E)  subsidized market.

Question 17

-The demand and supply schedules for pizza are in the table above.A price ceiling of $2 per slice results in

Accepted Answer

A)  a surplus of 20 slices of pizza. 
B)  a shortage of 20 slices of pizza. 
C)  a shortage of 40 slices of pizza. 
D)  a shortage of 60 slices of pizza. 
E)  neither a shortage nor a surplus. 
A)  a surplus of 20 slices of pizza. 
B)  a shortage of 20 slices of pizza. 
C)  a shortage of 40 slices of pizza. 
D)  a shortage of 60 slices of pizza. 
E)  neither a shortage nor a surplus.

Question 18

A price support leads to inefficiency because

Accepted Answer

A)  output is more than the efficient, equilibrium quantity. 
B)  the marginal benefit of the last unit produced is larger than the marginal cost. 
C)  the price charged is less than the equilibrium price. 
D)  producer surplus is less than consumer surplus. 
E)  producers must pay a subsidy to the government. 
A)  output is more than the efficient, equilibrium quantity. 
B)  the marginal benefit of the last unit produced is larger than the marginal cost. 
C)  the price charged is less than the equilibrium price. 
D)  producer surplus is less than consumer surplus. 
E)  producers must pay a subsidy to the government.

Question 19

A housing shortage results when

Accepted Answer

A)  a tax is imposed on housing. 
B)  a rent ceiling below the equilibrium rent is imposed. 
C)  a rent ceiling above the equilibrium rent is imposed. 
D)  rents rise. 
E)  a rent floor below the equilibrium rent is imposed. 
A)  a tax is imposed on housing. 
B)  a rent ceiling below the equilibrium rent is imposed. 
C)  a rent ceiling above the equilibrium rent is imposed. 
D)  rents rise. 
E)  a rent floor below the equilibrium rent is imposed.

Question 20

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

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

-The above figure shows a labor market with a minimum wage of $8 an hour.The deadweight loss equals the

To be effective in raising people's wages,a minimum wage must be set

A rent ceiling set below the equilibrium rent decreases the quantity of housing supplied because

If the minimum wage is above the equilibrium wage rate,then an increase in the minimum wage employment and unemployment.

-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 firms' surplus equals ________.

-The graph shows the labor market for painters.The lower the wage rate,the is the quantity of painters that firms demand and the is the quantity of painters that households are willing to supply.

If a minimum wage is introduced that is above the equilibrium wage rate,

-The graph shows the market for holiday condos in West Palm Beach.The equilibrium rent is ________ a week.

Will an increase in the minimum wage create more unemployment if the supply and demand for labor are highly elastic or highly inelastic?

Explain why in cities such as New York City that have rent ceiling laws,so many people who work in the city commute from outside the city.

In the labor market,as wages rise,households

Suppose the current equilibrium wage rate for housekeepers is $8.60 per hour.An increase in the minimum wage to $7.50 per hour leads to

-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 ________.

In order to have an impact,a must be set below the equilibrium price and when this occurs,.

An illegal market in which the price exceeds a legally imposed price ceiling is called a

-The demand and supply schedules for pizza are in the table above.A price ceiling of $2 per slice results in

A price support leads to inefficiency because

A housing shortage results when

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

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 above figure shows a housing market with a rent ceiling equal to $1,000.In this figure,what area is equal to the producer surplus?

-The above figure shows a labor market with a minimum wage of $8 an hour.The deadweight loss equals the

To be effective in raising people's wages,a minimum wage must be set

A rent ceiling set below the equilibrium rent decreases the quantity of housing supplied because

If the minimum wage is above the equilibrium wage rate,then an increase in the minimum wage ________ employment and ________ unemployment.

-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 firms' surplus equals ________.

-The graph shows the labor market for painters.The lower the wage rate,the ________ is the quantity of painters that firms demand and the ________ is the quantity of painters that households are willing to supply.

If a minimum wage is introduced that is above the equilibrium wage rate,

-The graph shows the market for holiday condos in West Palm Beach.The equilibrium rent is ________ a week.

Will an increase in the minimum wage create more unemployment if the supply and demand for labor are highly elastic or highly inelastic?

Explain why in cities such as New York City that have rent ceiling laws,so many people who work in the city commute from outside the city.

In the labor market,as wages rise,households

Suppose the current equilibrium wage rate for housekeepers is $8.60 per hour.An increase in the minimum wage to $7.50 per hour leads to

-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 ________.

In order to have an impact,a ________ must be set below the equilibrium price and when this occurs,________.

An illegal market in which the price exceeds a legally imposed price ceiling is called a

-The demand and supply schedules for pizza are in the table above.A price ceiling of $2 per slice results in

A price support leads to inefficiency because

A housing shortage results when

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

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

If the minimum wage is above the equilibrium wage rate,then an increase in the minimum wage employment and unemployment.

-The graph shows the labor market for painters.The lower the wage rate,the is the quantity of painters that firms demand and the is the quantity of painters that households are willing to supply.

In order to have an impact,a must be set below the equilibrium price and when this occurs,.