Question 1

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 2

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 3

-The above figure shows the market for DVDs. The government decides that all citizens deserve to watch affordable DVDs so a price ceiling of $12 per DVD is placed on DVDs. After this price ceiling is in effect and taking account of the resources lost in search, consumer surplus equals ________.

Accepted Answer

A) $900,000 
B) $400,000 
C) $200,000 
D) $180,000 
E) $100,000 
A) $900,000 
B) $400,000 
C) $200,000 
D) $180,000 
E) $100,000

Question 4

If the elasticity of demand for a product equals 3 and the supply is perfectly elastic, then if a tax is imposed on this product,

Accepted Answer

A) the buyer pays all the tax. 
B) the seller pays all the tax. 
C) the buyer pays 3/4 of the tax. 
D) the seller pays 3/4 of the tax. 
E) the buyer pays 4/3 of the tax. 
A) the buyer pays all the tax. 
B) the seller pays all the tax. 
C) the buyer pays 3/4 of the tax. 
D) the seller pays 3/4 of the tax. 
E) the buyer pays 4/3 of the tax.

Question 5

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

Question 6

-The figure above illustrates the bagel market. Which of the following statements is correct?

Accepted Answer

A) With a price ceiling of $1.00 per bagel, the price of a bagel is $1. 
B) With a price ceiling of $3.00 per bagel, the price of a bagel is $2. 
C) With no government intervention, the equilibrium price of a bagel is $2. 
D)  Only answers A and B are correct. 
E) Answers A, B, and C are correct. 
A) With a price ceiling of $1.00 per bagel, the price of a bagel is $1. 
B) With a price ceiling of $3.00 per bagel, the price of a bagel is $2. 
C) With no government intervention, the equilibrium price of a bagel is $2. 
D)  Only answers A and B are correct. 
E) Answers A, B, and C are correct.

Question 7

-The figure above shows the labor market in a region. In which of the following cases would the amount of unemployment be the largest?

Accepted Answer

A) when the market is at its equilibrium, with no minimum wage 
B) when a minimum wage of $4 an hour is imposed 
C) when a minimum wage of $6 an hour is imposed 
D) when a minimum wage of $8 an hour is imposed 
E) None of the above because the market will adjust so that there is no unemployment. 
A) when the market is at its equilibrium, with no minimum wage 
B) when a minimum wage of $4 an hour is imposed 
C) when a minimum wage of $6 an hour is imposed 
D) when a minimum wage of $8 an hour is imposed 
E) None of the above because the market will adjust so that there is no unemployment.

Question 8

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.

Question 9

A price ceiling is a government regulation that makes it illegal to charge a price

Accepted Answer

A) below the equilibrium price. 
B) above the equilibrium price. 
C) for a good or service. 
D) above some specified level. 
E) below some specified level. 
A) below the equilibrium price. 
B) above the equilibrium price. 
C) for a good or service. 
D) above some specified level. 
E) below some specified level.

Question 10

-The figure above shows the labor market in a region. If a minimum wage of $8 an hour is imposed, then there are ________ unemployed workers.

Accepted Answer

A) 20,000 
B) 40,000 
C) 60,000 
D) 80,000 
E) zero 
A) 20,000 
B) 40,000 
C) 60,000 
D) 80,000 
E) zero

Question 11

If the supply of automobiles becomes more inelastic, then a tax on automobiles is

Accepted Answer

A) paid more by the buyers after the change than before. 
B) paid more by the sellers after the change than before. 
C) always split evenly between the buyers and the sellers. 
D) paid more by the government after the change than before. 
E) always paid entirely by the buyers. 
A) paid more by the buyers after the change than before. 
B) paid more by the sellers after the change than before. 
C) always split evenly between the buyers and the sellers. 
D) paid more by the government after the change than before. 
E) always paid entirely by the buyers.

Question 12

A housing shortage results when

Accepted Answer

A) a tax is imposed on housing. 
B) a rent ceiling below the equilibrium rent is imposed. 
C) a rent ceiling above the equilibrium rent is imposed. 
D) rents rise. 
E) a rent floor below the equilibrium rent is imposed. 
A) a tax is imposed on housing. 
B) a rent ceiling below the equilibrium rent is imposed. 
C) a rent ceiling above the equilibrium rent is imposed. 
D) rents rise. 
E) a rent floor below the equilibrium rent is imposed.

Question 13

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 14

-The above figure shows the market for 2 bedroom townhomes in San Diego. If a rent ceiling is set at $1,000 per month, what is the maximum rent someone is willing to pay in the black market?

Accepted Answer

A) $1,300 per month 
B) $1,000 per month 
C) $900 per month 
D) $1,100 per month 
E) $1,400 per month 
A) $1,300 per month 
B) $1,000 per month 
C) $900 per month 
D) $1,100 per month 
E) $1,400 per month

Question 15

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 16

Tax incidence is the

Accepted Answer

A) burden buyers have to absorb from a tax on goods and services. 
B) burden sellers have to absorb from a tax on goods and services. 
C) lost revenue the government endures from goods and services that are not taxed. 
D) division of the burden of a tax between the buyer and the seller. 
E) deadweight loss created by a tax. 
A) burden buyers have to absorb from a tax on goods and services. 
B) burden sellers have to absorb from a tax on goods and services. 
C) lost revenue the government endures from goods and services that are not taxed. 
D) division of the burden of a tax between the buyer and the seller. 
E) deadweight loss created by a tax.

Question 17

The figure above shows the supply and demand curves in the market for rental housing. A rent ceiling is set at $400 per month.
-In the figure above, with the rent ceiling ________ units of housing are available, and black market rents might be as high as ________ a month.

Accepted Answer

A) 3,000; $625 
B) 6,000; $400 
C) 3,000; $550 
D) 4,000; $550 
E) 4,000; $625 
A) 3,000; $625 
B) 6,000; $400 
C) 3,000; $550 
D) 4,000; $550 
E) 4,000; $625

Question 18

If the government imposes an effective ________, output decreases and ________ increases.

Accepted Answer

A) price support; consumer surplus 
B) price floor; consumer surplus 
C) price support; total revenue 
D) price floor; marginal benefit to consumers 
E) price ceiling; efficiency 
A) price support; consumer surplus 
B) price floor; consumer surplus 
C) price support; total revenue 
D) price floor; marginal benefit to consumers 
E) price ceiling; efficiency

Question 19

Rent ceilings

Accepted Answer

A) increase search activity. 
B) result in surpluses. 
C) create efficiency. 
D) benefit producers. 
E) have no effect if they are set below the equilibrium rent. 
A) increase search activity. 
B) result in surpluses. 
C) create efficiency. 
D) benefit producers. 
E) have no effect if they are set below the equilibrium rent.

Question 20

One result of the minimum wage is

Accepted Answer

A) a black market for labor that pays more than the minimum wage. 
B) a black market for labor that pays less than the minimum wage. 
C) decreased job search activity. 
D) a decrease in unemployment among poor and unskilled workers. 
E) an increase in employment among poor and unskilled workers. 
A) a black market for labor that pays more than the minimum wage. 
B) a black market for labor that pays less than the minimum wage. 
C) decreased job search activity. 
D) a decrease in unemployment among poor and unskilled workers. 
E) an increase in employment among poor and unskilled workers.

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

A price floor

-The above figure shows the market for DVDs. The government decides that all citizens deserve to watch affordable DVDs so a price ceiling of $12 per DVD is placed on DVDs. After this price ceiling is in effect and taking account of the resources lost in search, consumer surplus equals ________.

If the elasticity of demand for a product equals 3 and the supply is perfectly elastic, then if a tax is imposed on this product,

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

-The figure above illustrates the bagel market. Which of the following statements is correct?

-The figure above shows the labor market in a region. In which of the following cases would the amount of unemployment be the largest?

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

A price ceiling is a government regulation that makes it illegal to charge a price

-The figure above shows the labor market in a region. If a minimum wage of $8 an hour is imposed, then there are ________ unemployed workers.

If the supply of automobiles becomes more inelastic, then a tax on automobiles is

A housing shortage results when

Producers favor a because .

-The above figure shows the market for 2 bedroom townhomes in San Diego. If a rent ceiling is set at $1,000 per month, what is the maximum rent someone is willing to pay in the black market?

A price floor makes prices

Tax incidence is the

The figure above shows the supply and demand curves in the market for rental housing. A rent ceiling is set at $400 per month. -In the figure above, with the rent ceiling units of housing are available, and black market rents might be as high as a month.

If the government imposes an effective , output decreases and increases.

Rent ceilings

One result of the minimum wage is

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Exam 7: Government Actions in Markets

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

A price floor

-The above figure shows the market for DVDs. The government decides that all citizens deserve to watch affordable DVDs so a price ceiling of $12 per DVD is placed on DVDs. After this price ceiling is in effect and taking account of the resources lost in search, consumer surplus equals ________.

If the elasticity of demand for a product equals 3 and the supply is perfectly elastic, then if a tax is imposed on this product,

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

-The figure above illustrates the bagel market. Which of the following statements is correct?

-The figure above shows the labor market in a region. In which of the following cases would the amount of unemployment be the largest?

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

A price ceiling is a government regulation that makes it illegal to charge a price

-The figure above shows the labor market in a region. If a minimum wage of $8 an hour is imposed, then there are ________ unemployed workers.

If the supply of automobiles becomes more inelastic, then a tax on automobiles is

A housing shortage results when

Producers favor a ________ because ________.

-The above figure shows the market for 2 bedroom townhomes in San Diego. If a rent ceiling is set at $1,000 per month, what is the maximum rent someone is willing to pay in the black market?

A price floor makes prices

Tax incidence is the

The figure above shows the supply and demand curves in the market for rental housing. A rent ceiling is set at $400 per month. -In the figure above, with the rent ceiling ________ units of housing are available, and black market rents might be as high as ________ a month.

If the government imposes an effective ________, output decreases and ________ increases.

Rent ceilings

One result of the minimum wage is

Getting Started

The Us and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Global Markets in Action

Externalities: Pollution, Education, and Health Care

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Potential Gdp and Economic Growth

Money and the Monetary System

Aggregate Supply and Aggregate Demand

Fiscal Policy and Monetary Policy

Filters

Producers favor a because .

The figure above shows the supply and demand curves in the market for rental housing. A rent ceiling is set at $400 per month. -In the figure above, with the rent ceiling units of housing are available, and black market rents might be as high as a month.

If the government imposes an effective , output decreases and increases.