Question 1

-The figure above shows the demand for and supply of rental housing in Smallton. If a rent ceiling is set at $400, what is the rent?

Accepted Answer

A)  $800 
B)  $600 
C)  $400 
D)  None of the above answers is correct. 
A)  $800 
B)  $600 
C)  $400 
D)  None of the above answers is correct.

Question 2

Discuss the inefficiencies created by a price floor.

Accepted Answer

A price floor prevents the efficient all

Question 3

-The figure above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $6 per hour, how many hours of students' labor are unemployed?

Accepted Answer

A)  12,000 hours 
B)  9,000 hours 
C)  6,000 hours 
D)  0 hours 
A)  12,000 hours 
B)  9,000 hours 
C)  6,000 hours 
D)  0 hours

Question 4

A rent ceiling results in a shortage of apartments. As a result, there is

Accepted Answer

A)  only a loss of consumer surplus for tenants. 
B)  only a loss of producer surplus for landlords. 
C)  a loss of both consumer and producer surplus. 
D)  a gain of both consumer and producer surplus. 
A)  only a loss of consumer surplus for tenants. 
B)  only a loss of producer surplus for landlords. 
C)  a loss of both consumer and producer surplus. 
D)  a gain of both consumer and producer surplus.

Question 5

-In the above figure, if the minimum wage is equal to ________, there would be ________ hours of labor employed.

Accepted Answer

A)  $8 per hour; 4,000 
B)  $8 per hour; 2,000 
C)  $6 per hour; 3,000 
D)  $4 per hour; 2,000 
A)  $8 per hour; 4,000 
B)  $8 per hour; 2,000 
C)  $6 per hour; 3,000 
D)  $4 per hour; 2,000

Question 6

-In the figure above, originally the apartment rental market is in short-run and long-run equilibrium with a rent of $600 per month. Then the government imposes a rent ceiling of $500 per month. If the law is strictly enforced, the maximum for which an apartment will rent on the black market is

Accepted Answer

A)  less than $600 per month. 
B)  $600 per month. 
C)  $700 per month. 
D)  more than $700 per month. 
A)  less than $600 per month. 
B)  $600 per month. 
C)  $700 per month. 
D)  more than $700 per month.

Question 7

The government sets a price floor for corn which is above the equilibrium price of corn. As a result, ________.

Accepted Answer

A)  the corn market will be efficient 
B)  a deadweight loss will be created 
C)  a shortage of corn will be created 
D)  none of the above answers is correct 
A)  the corn market will be efficient 
B)  a deadweight loss will be created 
C)  a shortage of corn will be created 
D)  none of the above answers is correct

Question 8

The stricter the enforcement of a price ceiling, the

Accepted Answer

A)  smaller is the difference between the black market price and the legal market price of the good. 
B)  larger is the difference between the black market price and the legal market price of the good. 
C)  greater is the amount of the good available in total, from either the legal market or the black market. 
D)  Both answers B and C are correct. 
A)  smaller is the difference between the black market price and the legal market price of the good. 
B)  larger is the difference between the black market price and the legal market price of the good. 
C)  greater is the amount of the good available in total, from either the legal market or the black market. 
D)  Both answers B and C are correct.

Question 9

-In the above figure, a price floor of $4

Accepted Answer

A)  leads to a shortage. 
B)  leads to a surplus. 
C)  has no effect. 
D)  shifts the demand curve leftward. 
A)  leads to a shortage. 
B)  leads to a surplus. 
C)  has no effect. 
D)  shifts the demand curve leftward.

Question 10

-The above table gives the demand schedule and the supply schedule for housing in Anytown, U.S.A. If a rent ceiling of $600 was imposed in the housing market, then

Accepted Answer

A)  there would be a surplus of apartments. 
B)  there would be a shortage of apartments. 
C)  the market would reach equilibrium at the quantity of 60 housing units. 
D)  the supply of housing would increase. 
A)  there would be a surplus of apartments. 
B)  there would be a shortage of apartments. 
C)  the market would reach equilibrium at the quantity of 60 housing units. 
D)  the supply of housing would increase.

Question 11

Suppose the government has declared beer to be an illegal substance and has imposed equal penalties on any person caught buying a beer and on any person caught selling a beer. Using the above figure, in which CBL is the cost of breaking the law, what is the equilibrium price and quantity with this new law in effect?

Accepted Answer

A)  $5 per quart and 300 quarts of beer 
B)  $3 per quart and 500 quarts of beer 
C)  $3 per quart and 100 quarts of beer 
D)  $1 per quart and 300 quarts of beer 
A)  $5 per quart and 300 quarts of beer 
B)  $3 per quart and 500 quarts of beer 
C)  $3 per quart and 100 quarts of beer 
D)  $1 per quart and 300 quarts of beer

Question 12

-In the figure above, originally the apartment rental market is in short-run and long-run equilibrium with a rent of $600 per month. Then the government imposes a rent ceiling of $500 per month. The rent ceiling leads to a

Accepted Answer

A)  shortage of 1000 apartments. 
B)  shortage of 2000 apartments. 
C)  surplus of 1000 apartments. 
D)  surplus of 2000 apartments. 
A)  shortage of 1000 apartments. 
B)  shortage of 2000 apartments. 
C)  surplus of 1000 apartments. 
D)  surplus of 2000 apartments.

Question 13

-The table above shows the demand for and supply of labor in a small less developed country.
a) Draw the demand and supply curves. What are the equilibrium wage and the level of employment?
b) Currently, the minimum wage is set at $4.50 per hour. How many hours are worked? How many hours of labor are unemployed?
c) If the minimum wage is raised to $6 per hour, what are employment and unemployment?

Accepted Answer

@#IMG-DLM& a) The figure above shows the labor mar

Question 14

Suppose that the equilibrium wage in the low-skilled labor market is $9.25. Further, suppose the federal government raises the minimum wage to $9.00 an hour from its present level of $8.15. The government's action of increasing the minimum wage will result in

Accepted Answer

A)  a decrease in unemployment. 
B)  an increase in unemployment. 
C)  a shortage of low-skilled labor. 
D)  neither a shortage nor a surplus of labor in the low-skilled labor market. 
A)  a decrease in unemployment. 
B)  an increase in unemployment. 
C)  a shortage of low-skilled labor. 
D)  neither a shortage nor a surplus of labor in the low-skilled labor market.

Question 15

Which would be a better source of tax revenue for the government, a good with elastic or a good with an inelastic demand? Explain your reasoning.

Accepted Answer

Inelastic goods are better sources of ta

Question 16

-In the above figure, CBL is the cost of breaking the law. If it is illegal to buy and sell, then the quantity of the good bought and sold will be

Accepted Answer

A)  100. 
B)  200. 
C)  300. 
D)  400. 
A)  100. 
B)  200. 
C)  300. 
D)  400.

Question 17

If enforcement is aimed at buyers of an illegal good, the result will be

Accepted Answer

A)  an increase in the short-run supply of the good. 
B)  a decrease in the short-run supply of the good. 
C)  a decrease in demand for the good. 
D)  an increase in the price of the good. 
A)  an increase in the short-run supply of the good. 
B)  a decrease in the short-run supply of the good. 
C)  a decrease in demand for the good. 
D)  an increase in the price of the good.

Question 18

-In the above figure, a black market emerges with a

Accepted Answer

A)  price ceiling of $4. 
B)  price floor of $2. 
C)  price floor of $4. 
D)  a rationed quantity 30. 
A)  price ceiling of $4. 
B)  price floor of $2. 
C)  price floor of $4. 
D)  a rationed quantity 30.

Question 19

Outlawing the sale of a good shifts the supply curve

Accepted Answer

A)  leftward and lowers the price. 
B)  leftward and raises the price. 
C)  rightward and lowers the price. 
D)  rightward and raises the price. 
A)  leftward and lowers the price. 
B)  leftward and raises the price. 
C)  rightward and lowers the price. 
D)  rightward and raises the price.

Question 20

Which of the following is an effect of a price ceiling set below the equilibrium price?

Accepted Answer

A)  Less of the good is produced with the ceiling than would be produced without the ceiling. 
B)  The price ceiling has no effect on the market equilibrium. 
C)  Consumers can buy more than they can at the equilibrium price because the ceiling price is lower. 
D)  None of the above answers is correct. 
A)  Less of the good is produced with the ceiling than would be produced without the ceiling. 
B)  The price ceiling has no effect on the market equilibrium. 
C)  Consumers can buy more than they can at the equilibrium price because the ceiling price is lower. 
D)  None of the above answers is correct.

-The figure above shows the demand for and supply of rental housing in Smallton. If a rent ceiling is set at $400, what is the rent?

Discuss the inefficiencies created by a price floor.

-The figure above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $6 per hour, how many hours of students' labor are unemployed?

A rent ceiling results in a shortage of apartments. As a result, there is

-In the above figure, if the minimum wage is equal to , there would be hours of labor employed.

-In the figure above, originally the apartment rental market is in short-run and long-run equilibrium with a rent of $600 per month. Then the government imposes a rent ceiling of $500 per month. If the law is strictly enforced, the maximum for which an apartment will rent on the black market is

The government sets a price floor for corn which is above the equilibrium price of corn. As a result, ________.

The stricter the enforcement of a price ceiling, the

-In the above figure, a price floor of $4

-The above table gives the demand schedule and the supply schedule for housing in Anytown, U.S.A. If a rent ceiling of $600 was imposed in the housing market, then

-In the figure above, originally the apartment rental market is in short-run and long-run equilibrium with a rent of $600 per month. Then the government imposes a rent ceiling of $500 per month. The rent ceiling leads to a

Suppose that the equilibrium wage in the low-skilled labor market is $9.25. Further, suppose the federal government raises the minimum wage to $9.00 an hour from its present level of $8.15. The government's action of increasing the minimum wage will result in

Which would be a better source of tax revenue for the government, a good with elastic or a good with an inelastic demand? Explain your reasoning.

-In the above figure, CBL is the cost of breaking the law. If it is illegal to buy and sell, then the quantity of the good bought and sold will be

If enforcement is aimed at buyers of an illegal good, the result will be

-In the above figure, a black market emerges with a

Outlawing the sale of a good shifts the supply curve

Which of the following is an effect of a price ceiling set below the equilibrium price?

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

Exam 6: Government Actions in Markets

-The figure above shows the demand for and supply of rental housing in Smallton. If a rent ceiling is set at $400, what is the rent?

Discuss the inefficiencies created by a price floor.

-The figure above shows the demand for and supply of labor of students in Smallville. If the minimum wage is set at $6 per hour, how many hours of students' labor are unemployed?

A rent ceiling results in a shortage of apartments. As a result, there is

-In the above figure, if the minimum wage is equal to ________, there would be ________ hours of labor employed.

-In the figure above, originally the apartment rental market is in short-run and long-run equilibrium with a rent of $600 per month. Then the government imposes a rent ceiling of $500 per month. If the law is strictly enforced, the maximum for which an apartment will rent on the black market is

The government sets a price floor for corn which is above the equilibrium price of corn. As a result, ________.

The stricter the enforcement of a price ceiling, the

-In the above figure, a price floor of $4

-The above table gives the demand schedule and the supply schedule for housing in Anytown, U.S.A. If a rent ceiling of $600 was imposed in the housing market, then

-In the figure above, originally the apartment rental market is in short-run and long-run equilibrium with a rent of $600 per month. Then the government imposes a rent ceiling of $500 per month. The rent ceiling leads to a

Suppose that the equilibrium wage in the low-skilled labor market is $9.25. Further, suppose the federal government raises the minimum wage to $9.00 an hour from its present level of $8.15. The government's action of increasing the minimum wage will result in

Which would be a better source of tax revenue for the government, a good with elastic or a good with an inelastic demand? Explain your reasoning.

-In the above figure, CBL is the cost of breaking the law. If it is illegal to buy and sell, then the quantity of the good bought and sold will be

If enforcement is aimed at buyers of an illegal good, the result will be

-In the above figure, a black market emerges with a

Outlawing the sale of a good shifts the supply curve

Which of the following is an effect of a price ceiling set below the equilibrium price?

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Public Choices, Public Goods, and Healthcare

Externalities

Markets for Factors of Production

Economic Inequality

Uncertainty and Information

Filters

-In the above figure, if the minimum wage is equal to , there would be hours of labor employed.