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 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 2

Suppose the equilibrium wage rate for apricot pickers is $9.00 per hour in California and at that wage rate the equilibrium quantity of apricot pickers is 14,000.If the minimum wage is set at $7.50 per hour, then the

Accepted Answer

A) quantity of apricot pickers employed increases. 
B) quantity of apricot pickers employed decreases. 
C) quantity of apricot pickers employed does not change. 
D) wage rate for apricot pickers increases. 
E) some apricot pickers are unemployed. 
A) quantity of apricot pickers employed increases. 
B) quantity of apricot pickers employed decreases. 
C) quantity of apricot pickers employed does not change. 
D) wage rate for apricot pickers increases. 
E) some apricot pickers are unemployed.

Question 3

-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 4

A price floor

Accepted Answer

A) is the highest price at which it is legal to trade a particular good, service, or factor of production. 
B) is the lowest price at which it is legal to trade a particular good, service, or factor of production. 
C) is an illegal price to charge. 
D) is the equilibrium price when the stock market crashes. 
E) is the lowest price for which the quantity demanded equals the quantity supplied. 
A) is the highest price at which it is legal to trade a particular good, service, or factor of production. 
B) is the lowest price at which it is legal to trade a particular good, service, or factor of production. 
C) is an illegal price to charge. 
D) is the equilibrium price when the stock market crashes. 
E) is the lowest price for which the quantity demanded equals the quantity supplied.

Question 5

In a housing market with a rent ceiling below the equilibrium rent, apartment seekers spend more time searching for an apartment than they would in a housing market without a rent ceiling.Why does this difference exist?

Accepted Answer

A) In the market with the rent ceiling, renters are searching for the best buy in apartments. 
B) In the market with the rent ceiling, there is a wide variety in the quality of apartments for rent. 
C) In the market with the rent ceiling, the quantity of housing demanded is greater than quantity supplied at the ceiling price. 
D) The premise of the question is incorrect because people spend less time searching with a rent ceiling since they no longer need to look for a low-priced apartment. 
E) The premise of the question is incorrect because there is no difference in the search time between a market with a rent ceiling and one without a ceiling. 
A) In the market with the rent ceiling, renters are searching for the best buy in apartments. 
B) In the market with the rent ceiling, there is a wide variety in the quality of apartments for rent. 
C) In the market with the rent ceiling, the quantity of housing demanded is greater than quantity supplied at the ceiling price. 
D) The premise of the question is incorrect because people spend less time searching with a rent ceiling since they no longer need to look for a low-priced apartment. 
E) The premise of the question is incorrect because there is no difference in the search time between a market with a rent ceiling and one without a ceiling.

Question 6

Suppose the marginal benefit the owner of a cherry orchard derives from hiring Lauren to pick cherries is $8 per hour.If the wage rate that Lauren earns is $7 per hour, then the orchard owner's surplus from Lauren's labor is ________ per hour.

Accepted Answer

A) $7 
B) $15 
C) $1 
D) $8 
E) $0 
A) $7 
B) $15 
C) $1 
D) $8 
E) $0

Question 7

When a price support is set above the equilibrium price, producers ________ the quantity supplied and consumers ________ the quantity demanded.

Accepted Answer

A) increase; increase 
B) increase; decrease 
C) decrease; increase 
D) decrease; decrease 
E) do not change; do not change 
A) increase; increase 
B) increase; decrease 
C) decrease; increase 
D) decrease; decrease 
E) do not change; do not change

Question 8

Why do rent ceilings lead to shortages and black markets?

Accepted Answer

Rent ceilings that are set below the mar

Question 9

Setting a price support in the market for sugar beets above equilibrium price ________ the quantity produced and ________ the quantity bought by consumers.

Accepted Answer

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

Question 10

The surplus created by a price floor will likely be

Accepted Answer

A) smaller if the good is a necessity. 
B) larger if the good is addictive. 
C) smaller if the good is a luxury. 
D) unaffected by the time that has elapsed since the price ceiling is implemented. 
E) None of the above answers is correct. 
A) smaller if the good is a necessity. 
B) larger if the good is addictive. 
C) smaller if the good is a luxury. 
D) unaffected by the time that has elapsed since the price ceiling is implemented. 
E) None of the above answers is correct.

Question 11

An effective price support ________ producers and ________ a deadweight loss.

Accepted Answer

A) has no effect on; does not create 
B) benefits; creates 
C) harms; creates 
D) benefits; does not create 
E) harms; does not create 
A) has no effect on; does not create 
B) benefits; creates 
C) harms; creates 
D) benefits; does not create 
E) harms; does not create

Question 12

Which of the following is an impact of a rent ceiling set below the equilibrium rent?

Accepted Answer

A) Renters find apartments to rent more rapidly because the rent ceiling is lower. 
B) Landlords' incentives to provide apartments decrease. 
C) The supply of apartments increases as soon as the rent ceiling is imposed. 
D) A surplus of housing occurs. 
E) Search for apartments decreases because renters need no longer search for the apartment with the lowest rent. 
A) Renters find apartments to rent more rapidly because the rent ceiling is lower. 
B) Landlords' incentives to provide apartments decrease. 
C) The supply of apartments increases as soon as the rent ceiling is imposed. 
D) A surplus of housing occurs. 
E) Search for apartments decreases because renters need no longer search for the apartment with the lowest rent.

Question 13

When a rent ceiling law is passed in a city, which of the following occurs?

Accepted Answer

A) The total price of renting an apartment decreases to all renters. 
B) The quantity of apartments supplied does not change. 
C) Some landlords and renters use methods such as "key money" to get around the rent ceiling law. 
D) Renters have no trouble finding a nice, reasonably priced apartment to rent. 
E) Generally the number of renters in the city increases because people move to the city to take advantage of the low-rent apartments. 
A) The total price of renting an apartment decreases to all renters. 
B) The quantity of apartments supplied does not change. 
C) Some landlords and renters use methods such as "key money" to get around the rent ceiling law. 
D) Renters have no trouble finding a nice, reasonably priced apartment to rent. 
E) Generally the number of renters in the city increases because people move to the city to take advantage of the low-rent apartments.

Question 14

-The figure above illustrates the current market for apartments in Washington, D.C.
a∙If the local government imposes a price ceiling of $1,500 per month, is there a shortage? If so, how much, if not, why not?
b∙If the local government imposes a price ceiling of $900 per month, is there a shortage? If so, how much, if not, why not?

Accepted Answer

a∙There is not a shortage.The equilibriu

Question 15

One result of a minimum wage is

Accepted Answer

A) illegal hiring of people at wages below the minimum wage. 
B) more people with jobs. 
C) a change in the equilibrium wage. 
D) lower costs paid by firms. 
E) fewer people searching for work because they realize that firms have decreased the number of people hired. 
A) illegal hiring of people at wages below the minimum wage. 
B) more people with jobs. 
C) a change in the equilibrium wage. 
D) lower costs paid by firms. 
E) fewer people searching for work because they realize that firms have decreased the number of people hired.

Question 16

-The figure above illustrates the current market for fast-food workers in Baltimore.
a∙Without any government intervention, what is the equilibrium wage rate and amount of employment?
b∙If the city government imposes a minimum wage of $3 an hour, what is the amount of employment? Does the minimum wage create any unemployment? Why or why not?
c∙If the city government imposes a minimum wage of $6 an hour, what is the amount of employment? Does the minimum wage create any unemployment? Why or why not?

Accepted Answer

a∙The equilibrium wage rate is $4 an hou

Question 17

-The figure above shows that the government subsidy accounts for ________ percent of the farmers' revenue.

Accepted Answer

A) 33 
B) 67 
C) 50 
D) 100 
E) 25 
A) 33 
B) 67 
C) 50 
D) 100 
E) 25

Question 18

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 19

-The above figure shows the market for finish carpenters in Bozeman.If there is a minimum wage set at $18, what is true?

Accepted Answer

A) The lowest wage for which someone is willing to work is $18 an hour. 
B) The quantity of jobs increases to 400. 
C) The lowest wage for which someone is willing to work is $20 an hour. 
D) 200 workers are employed. 
E) The quantity of jobs demanded is more than the quantity supplied. 
A) The lowest wage for which someone is willing to work is $18 an hour. 
B) The quantity of jobs increases to 400. 
C) The lowest wage for which someone is willing to work is $20 an hour. 
D) 200 workers are employed. 
E) The quantity of jobs demanded is more than the quantity supplied.

Question 20

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.

-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?

Suppose the equilibrium wage rate for apricot pickers is $9.00 per hour in California and at that wage rate the equilibrium quantity of apricot pickers is 14,000.If the minimum wage is set at $7.50 per hour, then the

-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?

A price floor

In a housing market with a rent ceiling below the equilibrium rent, apartment seekers spend more time searching for an apartment than they would in a housing market without a rent ceiling.Why does this difference exist?

Suppose the marginal benefit the owner of a cherry orchard derives from hiring Lauren to pick cherries is $8 per hour.If the wage rate that Lauren earns is $7 per hour, then the orchard owner's surplus from Lauren's labor is ________ per hour.

When a price support is set above the equilibrium price, producers the quantity supplied and consumers the quantity demanded.

Why do rent ceilings lead to shortages and black markets?

Setting a price support in the market for sugar beets above equilibrium price the quantity produced and the quantity bought by consumers.

The surplus created by a price floor will likely be

An effective price support producers and a deadweight loss.

Which of the following is an impact of a rent ceiling set below the equilibrium rent?

When a rent ceiling law is passed in a city, which of the following occurs?

One result of a minimum wage is

-The figure above shows that the government subsidy accounts for ________ percent of the farmers' revenue.

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 finish carpenters in Bozeman.If there is a minimum wage set at $18, what is true?

A black 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 resources lost due to search?

Suppose the equilibrium wage rate for apricot pickers is $9.00 per hour in California and at that wage rate the equilibrium quantity of apricot pickers is 14,000.If the minimum wage is set at $7.50 per hour, then the

-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?

A price floor

In a housing market with a rent ceiling below the equilibrium rent, apartment seekers spend more time searching for an apartment than they would in a housing market without a rent ceiling.Why does this difference exist?

Suppose the marginal benefit the owner of a cherry orchard derives from hiring Lauren to pick cherries is $8 per hour.If the wage rate that Lauren earns is $7 per hour, then the orchard owner's surplus from Lauren's labor is ________ per hour.

When a price support is set above the equilibrium price, producers ________ the quantity supplied and consumers ________ the quantity demanded.

Why do rent ceilings lead to shortages and black markets?

Setting a price support in the market for sugar beets above equilibrium price ________ the quantity produced and ________ the quantity bought by consumers.

The surplus created by a price floor will likely be

An effective price support ________ producers and ________ a deadweight loss.

Which of the following is an impact of a rent ceiling set below the equilibrium rent?

When a rent ceiling law is passed in a city, which of the following occurs?

One result of a minimum wage is

-The figure above shows that the government subsidy accounts for ________ percent of the farmers' revenue.

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 finish carpenters in Bozeman.If there is a minimum wage set at $18, what is true?

A black 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

When a price support is set above the equilibrium price, producers the quantity supplied and consumers the quantity demanded.

Setting a price support in the market for sugar beets above equilibrium price the quantity produced and the quantity bought by consumers.

An effective price support producers and a deadweight loss.