Exam 6: Governments Actions in Markets

Use the figure below to answer the following questions. Figure 6.2.1 -Refer to Figure 6.2.1. If the minimum wage is set at $2 per hour, what is the level of unemployment in millions of hours?

Discrimination allocates scarce housing

A lottery allocates housing to those

Which one of the following is likely to be the outcome of a rent ceiling imposed below the equilibrium rent?

Use the figure below to answer the following questions. Figure 6.1.2 -Refer to Figure 6.1.2. What would be the maximum black market price of the good if a price ceiling is set at $10 a unit?

Use the figure below to answer the following questions. Figure 6.1.1 -Refer to Figure 6.1.1. If the demand for rental housing increases and the demand curve shifts rightward from D₀ to D₁, and the market is unregulated, the number of rooms rented is

Suppose a minimum wage of $4 an hour is in force, resulting in unemployment of 10 million hours. Then the demand for labour increases such that supply and demand curves intersect at a wage rate of $5 per hour. What will happen to the equilibrium wage rate and employment?

A production quota

Use the table below to answer the following questions. Table 6.1.1 -Refer to Table 6.1.1, which gives the demand schedule and the supply schedule for the apartment market in Anytown, Alberta. If a rent ceiling of $300 is imposed in the apartment market, then

If the demand for a good is perfectly elastic, then a tax on the good will be paid

Governments tend to tax items with inelastic demand because

Use the table below to answer the following questions. Table 6.4.1 -Refer to Table 6.4.1. The table shows the demand and supply schedules for rice. The market for rice is in equilibrium. With a subsidy of $0.30 a box, the price of a box of rice is ________, the marginal cost of producing rice is ________ a box, and the quantity of rice produced is ________ boxes.

Suppose the cost of breaking the law is imposed on the buyers of an illegal good. This action will have its biggest impact on quantity if the demand for the good is

If enforcement is aimed at sellers of an illegal good, the

The buyer pays most of a tax if supply is relatively elastic because

Use the figure below to answer the following questions. Figure 6.1.1 -Consider the market for rental housing illustrated in Figure 6.1.1 when the demand curve is D₀. The equilibrium in an unregulated market is

Consider the effect of a minimum wage imposed in an unregulated labour market. Which of the following statements is correct? I. A minimum wage set above the equilibrium wage increases the quantity of labour supplied. Ii. A minimum wage set above the equilibrium wage increases the supply of labour. Iii. A minimum wage set above the equilibrium wage decreases the demand for labour.

Use the figure below to answer the following questions. Figure 6.3.2 -Refer to Figure 6.3.2. Government revenue from the tax is

Use the information below to answer the following questions. Fact 6.5.1 Hollywood: Organized Crime Hits the Movies The Mexican army seized 1,180 disc burners and 3.14 million copies of movies and TV shows from 23 warehouses in a move to fight piracy that costs Hollywood about $590 million a year. Source: Bloomberg, Businessweek, April 7, 2011 Assume that the marginal cost of producing a DVD (legal or illegal)is a constant $3 and that legal DVDs bear an additional marginal cost of $5 each in royalty payments to film studios. -Refer to Fact 6.5.1. If a penalty is imposed on either the buyer or the seller, and the penalty is the same, then the marginal benefit

If the price of a good is not affected by a tax, then