Question 1

The "fair results" view of fairness says that a minimum wage law set above the equilibrium wage rate is unfair because the minimum wage

Accepted Answer

A) does not apply to all workers. 
B) boosts the income of highly skilled workers. 
C) benefits only those workers who are able to find and keep a job. 
D) benefits nobody. 
E) cannot be enforced. 
A) does not apply to all workers. 
B) boosts the income of highly skilled workers. 
C) benefits only those workers who are able to find and keep a job. 
D) benefits nobody. 
E) cannot be enforced.

Question 2

Explain why low-skilled workers find that their employment opportunities are less with a minimum wage.

Accepted Answer

A minimum wage set above the equilibrium

Question 3

Suppose the equilibrium price of a gallon of milk is $4.If the government imposes a price floor of $5 per gallon of milk,

Accepted Answer

A) the quantity supplied of milk exceeds the quantity demanded. 
B) the quantity supplied of milk falls short of the quantity demanded. 
C) the supply increases. 
D) the market will not be affected. 
E) there will be a shortage of milk. 
A) the quantity supplied of milk exceeds the quantity demanded. 
B) the quantity supplied of milk falls short of the quantity demanded. 
C) the supply increases. 
D) the market will not be affected. 
E) there will be a shortage of milk.

Question 4

In the market for cotton, suppose the equilibrium price is $10 per ton and the equilibrium quantity is 100 tons.If the government then imposes a price support of $5 per ton,

Accepted Answer

A) a deadweight loss is created. 
B) the market becomes more efficient. 
C) consumer surplus increases. 
D) producers' economic profits increase. 
E) None of the above answers is correct. 
A) a deadweight loss is created. 
B) the market becomes more efficient. 
C) consumer surplus increases. 
D) producers' economic profits increase. 
E) None of the above answers is correct.

Question 5

-The graph shows the labor market for teenagers in Atlanta.If the government sets a minimum wage of $6 an hour, the number of teenagers employed is ________.

Accepted Answer

A) 7,000 
B) 5,000 
C) 4,000 
D) 3,000 
E) less than 3,000 
A) 7,000 
B) 5,000 
C) 4,000 
D) 3,000 
E) less than 3,000

Question 6

A rent ceiling on housing creates a problem of allocating the available housing units because

Accepted Answer

A) the demand for housing decreases and the demand curve shifts leftward. 
B) the supply of housing increases and the supply curve shifts rightward. 
C) a shortage of apartments occurs. 
D) a surplus of apartments occurs. 
E) it eliminates search, which is one of the major ways housing units are allocated. 
A) the demand for housing decreases and the demand curve shifts leftward. 
B) the supply of housing increases and the supply curve shifts rightward. 
C) a shortage of apartments occurs. 
D) a surplus of apartments occurs. 
E) it eliminates search, which is one of the major ways housing units are allocated.

Question 7

-The figure above shows the labor market in a region.For a minimum wage to change the wage rate and amount of employment, it must be

Accepted Answer

A) left to the forces of supply and demand. 
B) set above $6 an hour. 
C) set equal to $6 an hour. 
D) set below $6 an hour. 
E) set at $12 per hour. 
A) left to the forces of supply and demand. 
B) set above $6 an hour. 
C) set equal to $6 an hour. 
D) set below $6 an hour. 
E) set at $12 per hour.

Question 8

-The labor demand and labor supply schedules are given in the table above.If a minimum wage of $9 per hour is imposed,

Accepted Answer

A) a surplus of 300 workers occurs. 
B) a shortage of 300 workers occurs. 
C) there is no surplus or shortage of workers. 
D) the quantity demanded is 1,000 workers. 
E) there is unemployment of 700 workers. 
A) a surplus of 300 workers occurs. 
B) a shortage of 300 workers occurs. 
C) there is no surplus or shortage of workers. 
D) the quantity demanded is 1,000 workers. 
E) there is unemployment of 700 workers.

Question 9

Which of the following is true?
I∙A price ceiling is inefficient but fair.
Ii∙A price floor is inefficient and unfair.
Iii∙A price support increases the quantity produced.

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 10

-A rent ceiling is

Accepted Answer

A) fair, because it helps all renters. 
B) fair, because it insures that low-income families can rent apartments. 
C) fair, because it helps all landlords. 
D) unfair. 
E) fair, because it helps more renters than it harms. 
A) fair, because it helps all renters. 
B) fair, because it insures that low-income families can rent apartments. 
C) fair, because it helps all landlords. 
D) unfair. 
E) fair, because it helps more renters than it harms.

Question 11

Assuming that the rent ceiling is strictly enforced so that there is no black market, which of the following statements about a housing market with a rent ceiling set below the equilibrium rent is correct?

Accepted Answer

A) The rent for housing equals the ceiling rent or higher. 
B) There is excess supply of housing. 
C) The rent ceiling increases the amount of producers' surplus. 
D) The rent ceiling creates a deadweight loss. 
E) The rent ceiling enforces efficiency upon the housing market. 
A) The rent for housing equals the ceiling rent or higher. 
B) There is excess supply of housing. 
C) The rent ceiling increases the amount of producers' surplus. 
D) The rent ceiling creates a deadweight loss. 
E) The rent ceiling enforces efficiency upon the housing market.

Question 12

What is a price support program in an agricultural market? Explain its impact on a market.

Accepted Answer

A price support program is essentially a

Question 13

In a housing market with a rent ceiling set below the equilibrium rent, as time passes the supply of apartments

Accepted Answer

A) decreases. 
B) increases. 
C) does not change. 
D) becomes fixed by the government. 
E) increases while the demand for apartments decreases. 
A) decreases. 
B) increases. 
C) does not change. 
D) becomes fixed by the government. 
E) increases while the demand for apartments decreases.

Question 14

To have an effective price support program, the government must
I∙isolate the domestic market from the world market.
Ii∙pay the farmers a subsidy.
Iii∙introduce a price floor.

Accepted Answer

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

Question 15

-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.When the price ceiling is in place and taking account of the resources lost in search, consumer surplus ________ and producer surplus ________ compared to the equilibrium before the price ceiling was imposed.

Accepted Answer

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

Question 16

In the market for cotton, suppose the equilibrium price is $10 per ton and the equilibrium quantity is 100 tons.If the government then imposes a price support of $20 per ton,

Accepted Answer

A) the market price increases. 
B) the market price decreases. 
C) marginal cost decreases. 
D) consumer surplus increases. 
E) the deadweight loss is decreased. 
A) the market price increases. 
B) the market price decreases. 
C) marginal cost decreases. 
D) consumer surplus increases. 
E) the deadweight loss is decreased.

Question 17

A price ceiling in the market for gasoline that is below the equilibrium price will lead to

Accepted Answer

A) the quantity demanded of gasoline exceeding the quantity supplied. 
B) an increase in the demand for gasoline. 
C) a decrease in the supply of gasoline. 
D) the quantity supplied of gasoline exceeding the quantity demanded. 
E) no change in the market since the price ceiling is below the equilibrium price. 
A) the quantity demanded of gasoline exceeding the quantity supplied. 
B) an increase in the demand for gasoline. 
C) a decrease in the supply of gasoline. 
D) the quantity supplied of gasoline exceeding the quantity demanded. 
E) no change in the market since the price ceiling is below the equilibrium price.

Question 18

-The above figure shows the market for biologists.The government decides to set a minimum wage for biologists of $18 per hour.After this minimum wage is in effect, the firms' surplus equals ________.

Accepted Answer

A) $800 
B) $900 
C) $1,800 
D) $400 
E) $200 
A) $800 
B) $900 
C) $1,800 
D) $400 
E) $200

Question 19

Producers favor a ________ because ________.

Accepted Answer

A) price ceiling; the equilibrium price increases 
B) price support; the deadweight loss is minimized 
C) price ceiling; total revenue increases 
D) price support; total revenue increases 
E) price ceiling; consumer surplus increases 
A) price ceiling; the equilibrium price increases 
B) price support; the deadweight loss is minimized 
C) price ceiling; total revenue increases 
D) price support; total revenue increases 
E) price ceiling; consumer surplus increases

Question 20

-The above figure shows a housing market with a rent ceiling equal to $1,000.In this figure, after taking account of the resources lost in search, what area is equal to the consumer surplus?

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

The "fair results" view of fairness says that a minimum wage law set above the equilibrium wage rate is unfair because the minimum wage

Explain why low-skilled workers find that their employment opportunities are less with a minimum wage.

Suppose the equilibrium price of a gallon of milk is $4.If the government imposes a price floor of $5 per gallon of milk,

In the market for cotton, suppose the equilibrium price is $10 per ton and the equilibrium quantity is 100 tons.If the government then imposes a price support of $5 per ton,

-The graph shows the labor market for teenagers in Atlanta.If the government sets a minimum wage of $6 an hour, the number of teenagers employed is ________.

A rent ceiling on housing creates a problem of allocating the available housing units because

-The figure above shows the labor market in a region.For a minimum wage to change the wage rate and amount of employment, it must be

-The labor demand and labor supply schedules are given in the table above.If a minimum wage of $9 per hour is imposed,

Which of the following is true? I∙A price ceiling is inefficient but fair. Ii∙A price floor is inefficient and unfair. Iii∙A price support increases the quantity produced.

-A rent ceiling is

Assuming that the rent ceiling is strictly enforced so that there is no black market, which of the following statements about a housing market with a rent ceiling set below the equilibrium rent is correct?

What is a price support program in an agricultural market? Explain its impact on a market.

In a housing market with a rent ceiling set below the equilibrium rent, as time passes the supply of apartments

To have an effective price support program, the government must I∙isolate the domestic market from the world market. Ii∙pay the farmers a subsidy. Iii∙introduce a price floor.

In the market for cotton, suppose the equilibrium price is $10 per ton and the equilibrium quantity is 100 tons.If the government then imposes a price support of $20 per ton,

A price ceiling in the market for gasoline that is below the equilibrium price will lead to

-The above figure shows the market for biologists.The government decides to set a minimum wage for biologists of $18 per hour.After this minimum wage is in effect, the firms' surplus equals ________.

Producers favor a because .

-The above figure shows a housing market with a rent ceiling equal to $1,000.In this figure, after taking account of the resources lost in search, what area is equal to the consumer surplus?

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 "fair results" view of fairness says that a minimum wage law set above the equilibrium wage rate is unfair because the minimum wage

Explain why low-skilled workers find that their employment opportunities are less with a minimum wage.

Suppose the equilibrium price of a gallon of milk is $4.If the government imposes a price floor of $5 per gallon of milk,

In the market for cotton, suppose the equilibrium price is $10 per ton and the equilibrium quantity is 100 tons.If the government then imposes a price support of $5 per ton,

-The graph shows the labor market for teenagers in Atlanta.If the government sets a minimum wage of $6 an hour, the number of teenagers employed is ________.

A rent ceiling on housing creates a problem of allocating the available housing units because

-The figure above shows the labor market in a region.For a minimum wage to change the wage rate and amount of employment, it must be

-The labor demand and labor supply schedules are given in the table above.If a minimum wage of $9 per hour is imposed,

Which of the following is true? I∙A price ceiling is inefficient but fair. Ii∙A price floor is inefficient and unfair. Iii∙A price support increases the quantity produced.

-A rent ceiling is

Assuming that the rent ceiling is strictly enforced so that there is no black market, which of the following statements about a housing market with a rent ceiling set below the equilibrium rent is correct?

What is a price support program in an agricultural market? Explain its impact on a market.

In a housing market with a rent ceiling set below the equilibrium rent, as time passes the supply of apartments

To have an effective price support program, the government must I∙isolate the domestic market from the world market. Ii∙pay the farmers a subsidy. Iii∙introduce a price floor.

In the market for cotton, suppose the equilibrium price is $10 per ton and the equilibrium quantity is 100 tons.If the government then imposes a price support of $20 per ton,

A price ceiling in the market for gasoline that is below the equilibrium price will lead to

-The above figure shows the market for biologists.The government decides to set a minimum wage for biologists of $18 per hour.After this minimum wage is in effect, the firms' surplus equals ________.

Producers favor a ________ because ________.

-The above figure shows a housing market with a rent ceiling equal to $1,000.In this figure, after taking account of the resources lost in search, what area is equal to the consumer surplus?

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

Producers favor a because .