Question 1

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 2

New York City, which has had a rent ceiling law for more than sixty years, has many abandoned apartment buildings throughout the city.Which of the following explains this?

Accepted Answer

A) Few workers with jobs in the city want to live in there because of pollution. 
B) No building permits for new apartment buildings have been issued for over fifty years. 
C) Once any building gets so old, it is abandoned. 
D) Landlords have no incentive to finance maintenance and remodeling of apartment buildings. 
E) Rent ceilings make the construction of new buildings so profitable that old buildings are simply abandoned. 
A) Few workers with jobs in the city want to live in there because of pollution. 
B) No building permits for new apartment buildings have been issued for over fifty years. 
C) Once any building gets so old, it is abandoned. 
D) Landlords have no incentive to finance maintenance and remodeling of apartment buildings. 
E) Rent ceilings make the construction of new buildings so profitable that old buildings are simply abandoned.

Question 3

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 4

In the housing market, if a rent ceiling of $600.00 is imposed when the equilibrium rent is $500.00, why will nothing change?

Accepted Answer

A rent ceiling is the maximum legal rent

Question 5

To keep the price at the level set by a price support, the government must

Accepted Answer

A) buy some of the good. 
B) sell some of the good. 
C) receive a subsidy from the producers. 
D) insure that imports are readily available. 
E) be careful to always set the price support below the equilibrium price. 
A) buy some of the good. 
B) sell some of the good. 
C) receive a subsidy from the producers. 
D) insure that imports are readily available. 
E) be careful to always set the price support below the equilibrium price.

Question 6

-The graph shows the labor market for apple pickers in Ohio.If the government sets a minimum wage of $5 an hour, ________ apple pickers are unemployed.

Accepted Answer

A) 6,000 
B) 8,000 
C) 10,000 
D) 14,000 
E) more than 14,000 
A) 6,000 
B) 8,000 
C) 10,000 
D) 14,000 
E) more than 14,000

Question 7

-The figure above shows the labor market in a region.If a minimum wage of $8 an hour is imposed, then the quantity of labor supplied is ________ and the quantity of labor demanded is ________.

Accepted Answer

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

Question 8

Which of the following is true?
I∙A price support is inefficient.
Ii∙A price floor set above the equilibrium price creates a surplus.
Iii∙A price ceiling set above the equilibrium price creates a black market.

Accepted Answer

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

Question 9

One of the consequences of a rent ceiling set below the equilibrium rent is

Accepted Answer

A) decreased search activity. 
B) increased search activity. 
C) the establishment of landlord unions. 
D) surpluses of apartments. 
E) the elimination of the deadweight loss that would otherwise exist in the housing market. 
A) decreased search activity. 
B) increased search activity. 
C) the establishment of landlord unions. 
D) surpluses of apartments. 
E) the elimination of the deadweight loss that would otherwise exist in the housing market.

Question 10

How does the elasticity of demand for labor affect the deadweight loss from an increase in the minimum wage? Why?

Accepted Answer

The more elastic the demand for labor, t

Question 11

A minimum wage set above the equilibrium wage rate

Accepted Answer

A) increases the quantity of labor services supplied. 
B) decreases the quantity of labor services supplied. 
C) has no effect on the quantity of labor services supplied. 
D) shifts the labor supply curve rightward. 
E) shifts the labor supply curve leftward. 
A) increases the quantity of labor services supplied. 
B) decreases the quantity of labor services supplied. 
C) has no effect on the quantity of labor services supplied. 
D) shifts the labor supply curve rightward. 
E) shifts the labor supply curve leftward.

Question 12

-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 13

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

Accepted Answer

A) Firms' surplus increase with the minimum wage. 
B) Workers who retain their jobs have their wages rise. 
C) The market is efficient. 
D) The quantity supplied of workers is less that quantity demanded. 
E) Unemployment decreases because firms employ their workers more carefully. 
A) Firms' surplus increase with the minimum wage. 
B) Workers who retain their jobs have their wages rise. 
C) The market is efficient. 
D) The quantity supplied of workers is less that quantity demanded. 
E) Unemployment decreases because firms employ their workers more carefully.

Question 14

Suppose the equilibrium price of cotton is $100 per ton.A price support set at ________ than $100 per ton ________.

Accepted Answer

A) less; increases producer surplus 
B) less; increases consumer surplus 
C) more; increases consumer surplus 
D) more; decreases marginal cost 
E) more; creates a surplus that the government must buy 
A) less; increases producer surplus 
B) less; increases consumer surplus 
C) more; increases consumer surplus 
D) more; decreases marginal cost 
E) more; creates a surplus that the government must buy

Question 15

When a price ceiling is set below the equilibrium price, the quantity supplied ________ the quantity demanded and ________ exists.

Accepted Answer

A) is less than; a surplus 
B) is less than; a shortage 
C) is greater than; a surplus 
D) is greater than; a shortage 
E) equals; an equilibrium 
A) is less than; a surplus 
B) is less than; a shortage 
C) is greater than; a surplus 
D) is greater than; a shortage 
E) equals; an equilibrium

Question 16

-In the figure above, with the rent ceiling

Accepted Answer

A) there is a shortage of 3,000 units. 
B) there is a surplus of 3,000 units. 
C) there is a surplus of 2,000 units. 
D) there is a shortage of 1,000 units. 
E) the market is in equilibrium. 
A) there is a shortage of 3,000 units. 
B) there is a surplus of 3,000 units. 
C) there is a surplus of 2,000 units. 
D) there is a shortage of 1,000 units. 
E) the market is in equilibrium.

Question 17

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 18

Assume a market is producing efficiently.Which type of government intervention in this market might create a deadweight loss?
I∙a price ceiling
Ii∙a price floor
Iii∙a price support

Accepted Answer

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

Question 19

Suppose that the government imposes a price ceiling on gasoline that is below the equilibrium price.The black market for gasoline is ________ market in which the price ________ ceiling price.

Accepted Answer

A) a legal; exceeds the 
B) an illegal; exceeds the 
C) a legal; is less than the 
D) an illegal; is less than the 
E) an illegal; equals 
A) a legal; exceeds the 
B) an illegal; exceeds the 
C) a legal; is less than the 
D) an illegal; is less than the 
E) an illegal; equals

Question 20

In a crop market with a price support above the equilibrium price, the total amount of the subsidy paid to farmers is equal to the

Accepted Answer

A) quantity of the surplus crop multiplied by the support price. 
B) quantity of the crop produced multiplied by the support price. 
C) quantity of the crop purchased by domestic users multiplied by the support price. 
D) quantity of the surplus crop multiplied by the equilibrium price. 
E) quantity of the crop purchased by domestic users multiplied by the equilibrium price. 
A) quantity of the surplus crop multiplied by the support price. 
B) quantity of the crop produced multiplied by the support price. 
C) quantity of the crop purchased by domestic users multiplied by the support price. 
D) quantity of the surplus crop multiplied by the equilibrium price. 
E) quantity of the crop purchased by domestic users multiplied by the equilibrium price.

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

New York City, which has had a rent ceiling law for more than sixty years, has many abandoned apartment buildings throughout the city.Which of the following explains this?

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

In the housing market, if a rent ceiling of $600.00 is imposed when the equilibrium rent is $500.00, why will nothing change?

To keep the price at the level set by a price support, the government must

-The graph shows the labor market for apple pickers in Ohio.If the government sets a minimum wage of $5 an hour, ________ apple pickers are unemployed.

-The figure above shows the labor market in a region.If a minimum wage of $8 an hour is imposed, then the quantity of labor supplied is and the quantity of labor demanded is .

Which of the following is true? I∙A price support is inefficient. Ii∙A price floor set above the equilibrium price creates a surplus. Iii∙A price ceiling set above the equilibrium price creates a black market.

One of the consequences of a rent ceiling set below the equilibrium rent is

How does the elasticity of demand for labor affect the deadweight loss from an increase in the minimum wage? Why?

A minimum wage set above the equilibrium wage rate

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

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

Suppose the equilibrium price of cotton is $100 per ton.A price support set at than $100 per ton .

When a price ceiling is set below the equilibrium price, the quantity supplied the quantity demanded and exists.

-In the figure above, with the rent ceiling

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

Assume a market is producing efficiently.Which type of government intervention in this market might create a deadweight loss? I∙a price ceiling Ii∙a price floor Iii∙a price support

Suppose that the government imposes a price ceiling on gasoline that is below the equilibrium price.The black market for gasoline is market in which the price ceiling price.

In a crop market with a price support above the equilibrium price, the total amount of the subsidy paid to farmers is equal to the

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

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

New York City, which has had a rent ceiling law for more than sixty years, has many abandoned apartment buildings throughout the city.Which of the following explains this?

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

In the housing market, if a rent ceiling of $600.00 is imposed when the equilibrium rent is $500.00, why will nothing change?

To keep the price at the level set by a price support, the government must

-The graph shows the labor market for apple pickers in Ohio.If the government sets a minimum wage of $5 an hour, ________ apple pickers are unemployed.

-The figure above shows the labor market in a region.If a minimum wage of $8 an hour is imposed, then the quantity of labor supplied is ________ and the quantity of labor demanded is ________.

Which of the following is true? I∙A price support is inefficient. Ii∙A price floor set above the equilibrium price creates a surplus. Iii∙A price ceiling set above the equilibrium price creates a black market.

One of the consequences of a rent ceiling set below the equilibrium rent is

How does the elasticity of demand for labor affect the deadweight loss from an increase in the minimum wage? Why?

A minimum wage set above the equilibrium wage rate

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

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

Suppose the equilibrium price of cotton is $100 per ton.A price support set at ________ than $100 per ton ________.

When a price ceiling is set below the equilibrium price, the quantity supplied ________ the quantity demanded and ________ exists.

-In the figure above, with the rent ceiling

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

Assume a market is producing efficiently.Which type of government intervention in this market might create a deadweight loss? I∙a price ceiling Ii∙a price floor Iii∙a price support

Suppose that the government imposes a price ceiling on gasoline that is below the equilibrium price.The black market for gasoline is ________ market in which the price ________ ceiling price.

In a crop market with a price support above the equilibrium price, the total amount of the subsidy paid to farmers is equal to the

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

-The figure above shows the labor market in a region.If a minimum wage of $8 an hour is imposed, then the quantity of labor supplied is and the quantity of labor demanded is .

Suppose the equilibrium price of cotton is $100 per ton.A price support set at than $100 per ton .

When a price ceiling is set below the equilibrium price, the quantity supplied the quantity demanded and exists.

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

Suppose that the government imposes a price ceiling on gasoline that is below the equilibrium price.The black market for gasoline is market in which the price ceiling price.