Question 1

-In the figure above, the number of unemployed workers is

Accepted Answer

A) 4,000. 
B) 3,000. 
C) 2,000. 
D) 5,000. 
E) zero. 
A) 4,000. 
B) 3,000. 
C) 2,000. 
D) 5,000. 
E) zero.

Question 2

A price floor makes prices

Accepted Answer

A) below the price floor illegal. 
B) above the price floor illegal. 
C) below the equilibrium price illegal. 
D) above the equilibrium price illegal. 
E) None of the above answers is correct. 
A) below the price floor illegal. 
B) above the price floor illegal. 
C) below the equilibrium price illegal. 
D) above the equilibrium price illegal. 
E) None of the above answers is correct.

Question 3

-The above figure shows the market for winter jackets.In an effort to keep the nation warm, the president places a price ceiling of $100 in the market for winter jackets.What would be the maximum price someone would pay in the black market?

Accepted Answer

A) $100 per jacket 
B) $120 per jacket 
C) $130 per jacket 
D) $90 per jacket 
E) $140 per jacket 
A) $100 per jacket 
B) $120 per jacket 
C) $130 per jacket 
D) $90 per jacket 
E) $140 per jacket

Question 4

A regulation that sets the lowest price at which it is legal to trade a good is a

Accepted Answer

A) search ceiling. 
B) price floor. 
C) production ceiling. 
D) price ceiling. 
E) subsidy.. 
A) search ceiling. 
B) price floor. 
C) production ceiling. 
D) price ceiling. 
E) subsidy..

Question 5

Suppose that producers are richer than consumers.Is a price support program fair? Explain your answer.

Accepted Answer

A price support program is unfair.It is

Question 6

-As shown in the figure above, the rent ceiling ________ consumer surplus and ________ producer surplus.

Accepted Answer

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

Question 7

Which of the following is an example of the unfairness of rent control?

Accepted Answer

A) Voluntary exchange is encouraged by rent control. 
B) Racial discrimination in renting is discouraged by rent control. 
C) Newcomers have a more difficult time finding apartments. 
D) Rich people do not get apartments in these markets. 
E) Too many people rent apartments. 
A) Voluntary exchange is encouraged by rent control. 
B) Racial discrimination in renting is discouraged by rent control. 
C) Newcomers have a more difficult time finding apartments. 
D) Rich people do not get apartments in these markets. 
E) Too many people rent apartments.

Question 8

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

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 9

-The above figure shows a labor market.Before the minimum wage of $8 an hour is imposed, employment equals ________ workers; after the minimum wage of $8 an hour is imposed, employment equals ________ workers.

Accepted Answer

A) 80,000; 40,000 
B) 40,000; 80,000 
C) 60,000; 40,000 
D) 60,000; 80,000 
E) 80,000; 60,000 
A) 80,000; 40,000 
B) 40,000; 80,000 
C) 60,000; 40,000 
D) 60,000; 80,000 
E) 80,000; 60,000

Question 10

-The above figure shows the domestic market for tomatoes.Suppose this market is isolated from global competition and there is a support price set at $16.In this figure, what area equals the deadweight loss?

Accepted Answer

A) area B + area C + area D + area F 
B) area E 
C) area C + area D + area E + area G 
D) area A 
E) area F 
A) area B + area C + area D + area F 
B) area E 
C) area C + area D + area E + area G 
D) area A 
E) area F

Question 11

The "fair rules" view of fairness says that one of the reasons a minimum wage is unfair is because it

Accepted Answer

A) benefits all workers. 
B) blocks voluntary exchange. 
C) is imposed by government. 
D) is below the equilibrium wage rate. 
E) cannot be enforced. 
A) benefits all workers. 
B) blocks voluntary exchange. 
C) is imposed by government. 
D) is below the equilibrium wage rate. 
E) cannot be enforced.

Question 12

Explain why a price floor set below the equilibrium price is ineffective.

Accepted Answer

Price floors are legal minimums; it is l

Question 13

A rent ceiling creates a deadweight loss

Accepted Answer

A) if it is set below the equilibrium rent. 
B) if it is set equal to the equilibrium rent. 
C) if it set above the equilibrium rent. 
D) if it decreases the taxes the government collects in the housing market. 
E) never, because if it did create a deadweight loss, the government would not impose it. 
A) if it is set below the equilibrium rent. 
B) if it is set equal to the equilibrium rent. 
C) if it set above the equilibrium rent. 
D) if it decreases the taxes the government collects in the housing market. 
E) never, because if it did create a deadweight loss, the government would not impose it.

Question 14

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 15

Which of the following is true regarding a price support set above the equilibrium price?
I∙The price support increases the price consumers pay.
Ii∙The price support creates a deadweight loss.
Iii∙The price support decreases output.

Accepted Answer

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

Question 16

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 17

-The above figure shows the domestic market for tomatoes.Suppose this market is isolated from global competition and there is a support price set at $16.In this figure, what area equals the total subsidy paid to tomato farmers?

Accepted Answer

A) area E 
B) area B + area C + area D + area F 
C) area C + area D + area E + area G 
D) area A 
E) area F 
A) area E 
B) area B + area C + area D + area F 
C) area C + area D + area E + area G 
D) area A 
E) area F

Question 18

-In the figure above, the number of workers employed is ________, and the wage paid is ________.

Accepted Answer

A) 3,000; $7 per hour 
B) 7,000; $7 per hour 
C) 5,000; $5 per hour 
D) 5,000; $7 per hour 
E) 3,000; $5 per hour 
A) 3,000; $7 per hour 
B) 7,000; $7 per hour 
C) 5,000; $5 per hour 
D) 5,000; $7 per hour 
E) 3,000; $5 per hour

Question 19

Which of the following decrease the deadweight loss from a rent ceiling set below the equilibrium rent?
I∙lowering the ceiling
Ii∙dedicating more resources to enforcement of the ceiling
Iii∙raising the ceiling

Accepted Answer

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

Question 20

-The graph shows the market for ski chalets in Aspen.The Aspen Tourist Board asks the local government to impose a rent ceiling on ski chalets.If the rent ceiling is set at $1,900 a week, then there is ________.

Accepted Answer

A) a shortage of 3,000 chalets a week 
B) a surplus of 3,000 chalets a week 
C) neither a shortage nor surplus of chalets 
D) a shortage of 6,000 chalets a week 
E) a surplus of 6,000 chalets a week. 
A) a shortage of 3,000 chalets a week 
B) a surplus of 3,000 chalets a week 
C) neither a shortage nor surplus of chalets 
D) a shortage of 6,000 chalets a week 
E) a surplus of 6,000 chalets a week.

-In the figure above, the number of unemployed workers is

A price floor makes prices

-The above figure shows the market for winter jackets.In an effort to keep the nation warm, the president places a price ceiling of $100 in the market for winter jackets.What would be the maximum price someone would pay in the black market?

A regulation that sets the lowest price at which it is legal to trade a good is a

Suppose that producers are richer than consumers.Is a price support program fair? Explain your answer.

-As shown in the figure above, the rent ceiling consumer surplus and producer surplus.

Which of the following is an example of the unfairness of rent control?

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

-The above figure shows a labor market.Before the minimum wage of $8 an hour is imposed, employment equals workers; after the minimum wage of $8 an hour is imposed, employment equals workers.

-The above figure shows the domestic market for tomatoes.Suppose this market is isolated from global competition and there is a support price set at $16.In this figure, what area equals the deadweight loss?

The "fair rules" view of fairness says that one of the reasons a minimum wage is unfair is because it

Explain why a price floor set below the equilibrium price is ineffective.

A rent ceiling creates a deadweight loss

Which of the following can create a deadweight loss? I∙price supports Ii∙price floor Iii∙price ceiling

Which of the following is true regarding a price support set above the equilibrium price? I∙The price support increases the price consumers pay. Ii∙The price support creates a deadweight loss. Iii∙The price support decreases output.

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

-The above figure shows the domestic market for tomatoes.Suppose this market is isolated from global competition and there is a support price set at $16.In this figure, what area equals the total subsidy paid to tomato farmers?

-In the figure above, the number of workers employed is , and the wage paid is .

Which of the following decrease the deadweight loss from a rent ceiling set below the equilibrium rent? I∙lowering the ceiling Ii∙dedicating more resources to enforcement of the ceiling Iii∙raising the ceiling

-The graph shows the market for ski chalets in Aspen.The Aspen Tourist Board asks the local government to impose a rent ceiling on ski chalets.If the rent ceiling is set at $1,900 a week, then there is ________.

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

-In the figure above, the number of unemployed workers is

A price floor makes prices

-The above figure shows the market for winter jackets.In an effort to keep the nation warm, the president places a price ceiling of $100 in the market for winter jackets.What would be the maximum price someone would pay in the black market?

A regulation that sets the lowest price at which it is legal to trade a good is a

Suppose that producers are richer than consumers.Is a price support program fair? Explain your answer.

-As shown in the figure above, the rent ceiling ________ consumer surplus and ________ producer surplus.

Which of the following is an example of the unfairness of rent control?

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

-The above figure shows a labor market.Before the minimum wage of $8 an hour is imposed, employment equals ________ workers; after the minimum wage of $8 an hour is imposed, employment equals ________ workers.

-The above figure shows the domestic market for tomatoes.Suppose this market is isolated from global competition and there is a support price set at $16.In this figure, what area equals the deadweight loss?

The "fair rules" view of fairness says that one of the reasons a minimum wage is unfair is because it

Explain why a price floor set below the equilibrium price is ineffective.

A rent ceiling creates a deadweight loss

Which of the following can create a deadweight loss? I∙price supports Ii∙price floor Iii∙price ceiling

Which of the following is true regarding a price support set above the equilibrium price? I∙The price support increases the price consumers pay. Ii∙The price support creates a deadweight loss. Iii∙The price support decreases output.

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

-The above figure shows the domestic market for tomatoes.Suppose this market is isolated from global competition and there is a support price set at $16.In this figure, what area equals the total subsidy paid to tomato farmers?

-In the figure above, the number of workers employed is ________, and the wage paid is ________.

Which of the following decrease the deadweight loss from a rent ceiling set below the equilibrium rent? I∙lowering the ceiling Ii∙dedicating more resources to enforcement of the ceiling Iii∙raising the ceiling

-The graph shows the market for ski chalets in Aspen.The Aspen Tourist Board asks the local government to impose a rent ceiling on ski chalets.If the rent ceiling is set at $1,900 a week, then there is ________.

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

-As shown in the figure above, the rent ceiling consumer surplus and producer surplus.

-The above figure shows a labor market.Before the minimum wage of $8 an hour is imposed, employment equals workers; after the minimum wage of $8 an hour is imposed, employment equals workers.

-In the figure above, the number of workers employed is , and the wage paid is .