Question 1

In an unregulated housing market with no rent ceiling,

Accepted Answer

A) scarce housing resources are allocated inefficiently. 
B) scarce housing resources are allocated efficiently. 
C) tenants pay a lower rent compared to what they pay in a market with an effective rent ceiling. 
D) landlords receive less compared to what they receive in a market with an effective rent ceiling. 
E) consumer surplus equals producer surplus. 
A) scarce housing resources are allocated inefficiently. 
B) scarce housing resources are allocated efficiently. 
C) tenants pay a lower rent compared to what they pay in a market with an effective rent ceiling. 
D) landlords receive less compared to what they receive in a market with an effective rent ceiling. 
E) consumer surplus equals producer surplus.

Question 2

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

Accepted Answer

A) zero. 
B) $100. 
C) $300. 
D) $400. 
E) $600. 
A) zero. 
B) $100. 
C) $300. 
D) $400. 
E) $600.

Question 3

Cigarette Taxes, Black Markets, and Crime: Lessons from New York's 50-Year Losing Battle
New York City has the highest cigarette taxes in the country. During the four months following the recent tax hike, sales of taxed cigarettes in the city fell by more than 50 percent as consumers turned to the city's bustling black market. The thriving illegal market for cigarettes has diverted billions of dollars from legitimate businesses and governments to criminals.
Source: Cato Institute, February 6, 2003
-A subsidy

Accepted Answer

A) raises marginal social benefit above marginal social cost. 
B) makes marginal social cost equal marginal social benefit. 
C) results in efficient production. 
D) raises marginal social cost above marginal social benefit. 
E) makes world prices higher than domestic prices. 
A) raises marginal social benefit above marginal social cost. 
B) makes marginal social cost equal marginal social benefit. 
C) results in efficient production. 
D) raises marginal social cost above marginal social benefit. 
E) makes world prices higher than domestic prices.

Question 4

Use the table below to answer the following questions.
Table 6.3.2
  
-Refer to Table 6.3.2.You are in the business of producing and selling hamburgers, French fries, pizza, and ice cream.The mayor of your city plans to impose a sales tax on one of these products.Based on the elasticities in the table, on which of these goods would your customers prefer to be taxed?

Accepted Answer

A) hamburgers 
B) French fries 
C) pizza 
D) ice cream 
E) Your customers are indifferent about which good is taxed. 
A) hamburgers 
B) French fries 
C) pizza 
D) ice cream 
E) Your customers are indifferent about which good is taxed.

Question 5

Use the table below to answer the following questions.
Table 6.3.1
  
-Refer to Table 6.3.1.Suppose a sales tax of $2 a unit is imposed on the good described in the table.The new price paid by consumers is $ ________ and ________ units are sold.

Accepted Answer

A) $6; 400 
B) $7; 700 
C) $7; 500 
D) $6.50; 500 
E) $6.50; 700 
A) $6; 400 
B) $7; 700 
C) $7; 500 
D) $6.50; 500 
E) $6.50; 700

Question 6

Use the figure below to answer the following questions.
   
Figure 6.3.3
-Refer to Figure 6.3.3.Suppose a tax of $1 is imposed.In which market would tax revenue be the highest?

Accepted Answer

A) (a) 
B) (b) 
C) (c) 
D) (d) 
E) all markets equally 
A) (a) 
B) (b) 
C) (c) 
D) (d) 
E) all markets equally

Question 7

Use the figure below to answer the following questions.
   
Figure 6.1.2
-Refer to Figure 6.1.2.If a rigorously enforced price ceiling is set at $10, then

Accepted Answer

A) 100 units will be sold at a price of $20 each. 
B) 100 units will be sold at a price of $15 each. 
C) 150 units will be sold at a price of $15 each. 
D) 200 units will be sold at a price of $10 each. 
E) 100 units will be sold at a price of $10 each. 
A) 100 units will be sold at a price of $20 each. 
B) 100 units will be sold at a price of $15 each. 
C) 150 units will be sold at a price of $15 each. 
D) 200 units will be sold at a price of $10 each. 
E) 100 units will be sold at a price of $10 each.

Question 8

Use the figure below to answer the following questions.
   
Figure 6.2.1
-Refer to Figure 6.2.1.Suppose a $5 per hour minimum wage is in force.What is the lowest wage per hour an unemployed person would be willing to accept?

Accepted Answer

A) $2 
B) $3 
C) $4 
D) $5 
E) $1 
A) $2 
B) $3 
C) $4 
D) $5 
E) $1

Question 9

Suppose that buying and selling a certain good is made illegal.In the market for this good, the demand curve shifts ________ and the supply curve shifts ________.

Accepted Answer

A) rightward; rightward 
B) leftward; leftward 
C) rightward; leftward 
D) leftward; rightward 
E) None of the above; neither the demand curve nor the supply curve shifts. 
A) rightward; rightward 
B) leftward; leftward 
C) rightward; leftward 
D) leftward; rightward 
E) None of the above; neither the demand curve nor the supply curve shifts.

Question 10

Suppose the demand for CDs is elastic, but not perfectly elastic, and the supply is inelastic, but not perfectly inelastic.A tax on CDs is paid

Accepted Answer

A) equally by buyers and sellers. 
B) mostly by sellers. 
C) mostly by buyers. 
D) by neither buyers nor sellers. 
E) totally by sellers. 
A) equally by buyers and sellers. 
B) mostly by sellers. 
C) mostly by buyers. 
D) by neither buyers nor sellers. 
E) totally by sellers.

Question 11

Which one of the following is not likely to be an outcome of a rent ceiling?

Accepted Answer

A) a black market for rent-controlled housing 
B) long waiting lists of potential renters for rent-controlled housing 
C) a short-run shortage of housing 
D) a black market price below the rent ceiling 
E) increased search activity for rent-controlled housing 
A) a black market for rent-controlled housing 
B) long waiting lists of potential renters for rent-controlled housing 
C) a short-run shortage of housing 
D) a black market price below the rent ceiling 
E) increased search activity for rent-controlled housing

Question 12

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 there is a strictly enforced rent ceiling of $150 per room,

Accepted Answer

A) the number of rooms rented will increase to 2,000. 
B) the number of rooms rented is 1,500. 
C) there is a housing shortage of 500 rooms. 
D) the number of rooms rented decreases to 1,000. 
E) both B and C 
A) the number of rooms rented will increase to 2,000. 
B) the number of rooms rented is 1,500. 
C) there is a housing shortage of 500 rooms. 
D) the number of rooms rented decreases to 1,000. 
E) both B and C

Question 13

When rent is not permitted to allocate scarce housing, what other mechanisms are available?

Accepted Answer

A) a lottery 
B) first-come, first-served 
C) discrimination 
D) both A and B are correct 
E) A, B and C are correct 
A) a lottery 
B) first-come, first-served 
C) discrimination 
D) both A and B are correct 
E) A, B and C are correct

Question 14

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

Accepted Answer

A) there is a shortage of 40 apartments. 
B) there is a surplus of 40 apartments. 
C) the supply of apartments will increase. 
D) the supply of apartments will decrease. 
E) the quantity of apartments supplied is 60 units. 
A) there is a shortage of 40 apartments. 
B) there is a surplus of 40 apartments. 
C) the supply of apartments will increase. 
D) the supply of apartments will decrease. 
E) the quantity of apartments supplied is 60 units.

Question 15

A production quota

Accepted Answer

A) increases the marginal social cost of production. 
B) lowers the price and increases the marginal social cost of production. 
C) increases demand for the good. 
D) raises the price and decreases the marginal social cost of production. 
E) makes production more efficient. 
A) increases the marginal social cost of production. 
B) lowers the price and increases the marginal social cost of production. 
C) increases demand for the good. 
D) raises the price and decreases the marginal social cost of production. 
E) makes production more efficient.

Question 16

In an unregulated housing market with no rent ceiling,

Accepted Answer

A) marginal social cost is greater than marginal social benefit. 
B) marginal social benefit is greater than marginal social cost. 
C) marginal social benefit equals marginal social cost. 
D) marginal social benefit is negative. 
E) marginal social cost is negative. 
A) marginal social cost is greater than marginal social benefit. 
B) marginal social benefit is greater than marginal social cost. 
C) marginal social benefit equals marginal social cost. 
D) marginal social benefit is negative. 
E) marginal social cost is negative.

Question 17

Use the figure below to answer the following questions.
   
Figure 6.1.1
-Refer to Figure 6.1.1.Suppose the demand for rental housing is shown by demand curve D₁, and there is a rent ceiling of $150 per room.What is the highest amount that would be expended on search activity?

Accepted Answer

A) $200 
B) $150 
C) $100 
D) $50 
E) $0 
A) $200 
B) $150 
C) $100 
D) $50 
E) $0

Question 18

When a price ceiling is set below the equilibrium price,

Accepted Answer

A) the demand curve shifts leftward. 
B) the quantity supplied exceeds the quantity demanded. 
C) the quantity supplied equals the quantity demanded. 
D) the supply curve shifts rightward. 
E) the quantity demanded exceeds the quantity supplied. 
A) the demand curve shifts leftward. 
B) the quantity supplied exceeds the quantity demanded. 
C) the quantity supplied equals the quantity demanded. 
D) the supply curve shifts rightward. 
E) the quantity demanded exceeds the quantity supplied.

Question 19

In an unregulated housing market with no rent ceiling, the rent is determined by the

Accepted Answer

A) landlords only. 
B) tenants only. 
C) government only. 
D) market. 
E) landlords, tenants, and the government. 
A) landlords only. 
B) tenants only. 
C) government only. 
D) market. 
E) landlords, tenants, and the government.

Question 20

An illegal market in which the equilibrium price exceeds the price ceiling is

Accepted Answer

A) a rental market. 
B) a capital market. 
C) a black market. 
D) an efficient market. 
E) a housing market. 
A) a rental market. 
B) a capital market. 
C) a black market. 
D) an efficient market. 
E) a housing market.

In an unregulated housing market with no rent ceiling,

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 table below to answer the following questions. Table 6.3.1 -Refer to Table 6.3.1.Suppose a sales tax of $2 a unit is imposed on the good described in the table.The new price paid by consumers is $ and units are sold.

Use the figure below to answer the following questions. Figure 6.3.3 -Refer to Figure 6.3.3.Suppose a tax of $1 is imposed.In which market would tax revenue be the highest?

Use the figure below to answer the following questions. Figure 6.1.2 -Refer to Figure 6.1.2.If a rigorously enforced price ceiling is set at $10, then

Use the figure below to answer the following questions. Figure 6.2.1 -Refer to Figure 6.2.1.Suppose a $5 per hour minimum wage is in force.What is the lowest wage per hour an unemployed person would be willing to accept?

Suppose that buying and selling a certain good is made illegal.In the market for this good, the demand curve shifts and the supply curve shifts .

Suppose the demand for CDs is elastic, but not perfectly elastic, and the supply is inelastic, but not perfectly inelastic.A tax on CDs is paid

Which one of the following is not likely to be an outcome of a rent ceiling?

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 there is a strictly enforced rent ceiling of $150 per room,

When rent is not permitted to allocate scarce housing, what other mechanisms are available?

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

A production quota

In an unregulated housing market with no rent ceiling,

Use the figure below to answer the following questions. Figure 6.1.1 -Refer to Figure 6.1.1.Suppose the demand for rental housing is shown by demand curve D₁, and there is a rent ceiling of $150 per room.What is the highest amount that would be expended on search activity?

When a price ceiling is set below the equilibrium price,

In an unregulated housing market with no rent ceiling, the rent is determined by the

An illegal market in which the equilibrium price exceeds the price ceiling is

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Filters

Exam 6: Government Actions in Markets

In an unregulated housing market with no rent ceiling,

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 table below to answer the following questions. Table 6.3.1 -Refer to Table 6.3.1.Suppose a sales tax of $2 a unit is imposed on the good described in the table.The new price paid by consumers is $ ________ and ________ units are sold.

Use the figure below to answer the following questions. Figure 6.3.3 -Refer to Figure 6.3.3.Suppose a tax of $1 is imposed.In which market would tax revenue be the highest?

Use the figure below to answer the following questions. Figure 6.1.2 -Refer to Figure 6.1.2.If a rigorously enforced price ceiling is set at $10, then

Use the figure below to answer the following questions. Figure 6.2.1 -Refer to Figure 6.2.1.Suppose a $5 per hour minimum wage is in force.What is the lowest wage per hour an unemployed person would be willing to accept?

Suppose that buying and selling a certain good is made illegal.In the market for this good, the demand curve shifts ________ and the supply curve shifts ________.

Suppose the demand for CDs is elastic, but not perfectly elastic, and the supply is inelastic, but not perfectly inelastic.A tax on CDs is paid

Which one of the following is not likely to be an outcome of a rent ceiling?

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 there is a strictly enforced rent ceiling of $150 per room,

When rent is not permitted to allocate scarce housing, what other mechanisms are available?

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

A production quota

In an unregulated housing market with no rent ceiling,

Use the figure below to answer the following questions. Figure 6.1.1 -Refer to Figure 6.1.1.Suppose the demand for rental housing is shown by demand curve D₁, and there is a rent ceiling of $150 per room.What is the highest amount that would be expended on search activity?

When a price ceiling is set below the equilibrium price,

In an unregulated housing market with no rent ceiling, the rent is determined by the

An illegal market in which the equilibrium price exceeds the price ceiling is

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Filters

Use the table below to answer the following questions. Table 6.3.1 -Refer to Table 6.3.1.Suppose a sales tax of $2 a unit is imposed on the good described in the table.The new price paid by consumers is $ and units are sold.

Suppose that buying and selling a certain good is made illegal.In the market for this good, the demand curve shifts and the supply curve shifts .