Question 1

Suppose the current equilibrium wage rate for lifeguards in Houston is $7.85 an hour. A minimum wage law that creates a price floor of $8.50 an hour leads to

Accepted Answer

A) a surplus of lifeguards in Houston. 
B) a shortage of lifeguards in Houston. 
C) no changes in the lifeguard market. 
D) a change in the quantity of lifeguards supplied but no change in the quantity of lifeguards demanded. 
E) an increase in the number of lifeguards employed. 
A) a surplus of lifeguards in Houston. 
B) a shortage of lifeguards in Houston. 
C) no changes in the lifeguard market. 
D) a change in the quantity of lifeguards supplied but no change in the quantity of lifeguards demanded. 
E) an increase in the number of lifeguards employed.

Question 2

The deadweight loss in a housing market with a rent ceiling set below the equilibrium rent is the

Accepted Answer

A) loss to those who cannot find apartments and the gain to landlords who charge black market rents. 
B) loss to those who cannot find apartments and the loss to landlords who cannot offer housing at the lower rent ceiling. 
C) loss to landlords and the gain to tenants who pay a fairer rent. 
D) loss to tenants and the gain to landlords who have the incentive to offer more apartments for rent. 
E) gain to landlords and to tenants because now a fairer rent is charged. 
A) loss to those who cannot find apartments and the gain to landlords who charge black market rents. 
B) loss to those who cannot find apartments and the loss to landlords who cannot offer housing at the lower rent ceiling. 
C) loss to landlords and the gain to tenants who pay a fairer rent. 
D) loss to tenants and the gain to landlords who have the incentive to offer more apartments for rent. 
E) gain to landlords and to tenants because now a fairer rent is charged.

Question 3

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 4

-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 quantity demanded is equal to the quantity supplied. 
B) With a price ceiling of $3.00 per bagel, the quantity demanded is greater than the quantity supplied. 
C) With a price ceiling of $1.00 per bagel, there is a shortage of bagels. 
D) Answers A and B are correct. 
E) Answers B and C are correct. 
A) With a price ceiling of $1.00 per bagel, the quantity demanded is equal to the quantity supplied. 
B) With a price ceiling of $3.00 per bagel, the quantity demanded is greater than the quantity supplied. 
C) With a price ceiling of $1.00 per bagel, there is a shortage of bagels. 
D) Answers A and B are correct. 
E) Answers B and C are correct.

Question 5

When a price ceiling below the equilibrium price is imposed on a good, production of the good

Accepted Answer

A) increases. 
B) decreases. 
C) does not change. 
D) is frozen at the pre-ceiling level. 
E) either increases or decreases depending on whether the supply of the good increases or decreases when the price ceiling is imposed. 
A) increases. 
B) decreases. 
C) does not change. 
D) is frozen at the pre-ceiling level. 
E) either increases or decreases depending on whether the supply of the good increases or decreases when the price ceiling is imposed.

Question 6

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 7

New York City, which has had a rent ceiling law for more than fifty 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 8

-In the figure above, suppose that the government imposes a tax of $4 per pizza. Then, the tax revenue collected by the government equals

Accepted Answer

A) $240. 
B) $320. 
C) $160. 
D) $120. 
E) $4. 
A) $240. 
B) $320. 
C) $160. 
D) $120. 
E) $4.

Question 9

-The figure above shows the market for tires. The figure shows that the government has imposed a tax of ________ per tire and that ________ pay most of the tax.

Accepted Answer

A) $30; buyers 
B) $40; buyers 
C) $30; sellers 
D) $60; sellers 
E) $60; buyers 
A) $30; buyers 
B) $40; buyers 
C) $30; sellers 
D) $60; sellers 
E) $60; buyers

Suppose the current equilibrium wage rate for lifeguards in Houston is $7.85 an hour. A minimum wage law that creates a price floor of $8.50 an hour leads to

The deadweight loss in a housing market with a rent ceiling set below the equilibrium rent is the

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

When a price ceiling below the equilibrium price is imposed on a good, production of the good

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

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

-In the figure above, suppose that the government imposes a tax of $4 per pizza. Then, the tax revenue collected by the government equals

-The figure above shows the market for tires. The figure shows that the government has imposed a tax of per tire and that pay most of the tax.

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

Suppose the current equilibrium wage rate for lifeguards in Houston is $7.85 an hour. A minimum wage law that creates a price floor of $8.50 an hour leads to

The deadweight loss in a housing market with a rent ceiling set below the equilibrium rent is the

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

When a price ceiling below the equilibrium price is imposed on a good, production of the good

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

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

-In the figure above, suppose that the government imposes a tax of $4 per pizza. Then, the tax revenue collected by the government equals

-The figure above shows the market for tires. The figure shows that the government has imposed a tax of ________ per tire and that ________ pay most of the tax.

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

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

-The figure above shows the market for tires. The figure shows that the government has imposed a tax of per tire and that pay most of the tax.