Question 1

A rent ceiling set above the equilibrium rent has no effect.

Accepted Answer

A) True 
 B)False

Question 2

-The figure above shows the market for cotton in Georgestan. The government regulates the market with a production quota set at 8 million pounds per year. The price of cotton in Georgestan is

Accepted Answer

A)  30 cents per pound. 
B)  40 cents per pound. 
C)  60 cents per pound. 
D)  50 cents per pound. 
A)  30 cents per pound. 
B)  40 cents per pound. 
C)  60 cents per pound. 
D)  50 cents per pound.

Question 3

-In the figure above, the demand curve shifts rightward from D0 to D1 so that D1 is the relevant demand curve. Suppose the government imposes a rent ceiling of $300 per month. In the short run there will be

Accepted Answer

A)  a deadweight loss created. 
B)  a reduction in renters' search activities. 
C)  an elimination of a black market. 
D)  an increased number apartments rented. 
A)  a deadweight loss created. 
B)  a reduction in renters' search activities. 
C)  an elimination of a black market. 
D)  an increased number apartments rented.

Question 4

A rent ceiling set above the equilibrium rent efficiently allocates resources in the housing market.

Accepted Answer

A) True 
 B)False

Question 5

What is search activity and how does it influence consumer surplus when a rent ceiling creates a housing shortage?

Accepted Answer

Search activity is the time spent lookin

Question 6

-The above figure shows the demand and supply curves for housing As a result of a rent ceiling at $500, the deadweight loss is represented by the area

Accepted Answer

A)  rectangle feag. 
B)  triangle gfe. 
C)  triangle eca. 
D)  triangle acb. 
A)  rectangle feag. 
B)  triangle gfe. 
C)  triangle eca. 
D)  triangle acb.

Question 7

A sales tax is divided so that the

Accepted Answer

A)  buyers pay the full amount if demand is perfectly elastic. 
B)  buyers pay the full amount if supply is perfectly inelastic. 
C)  sellers pay the full amount if supply is perfectly elastic. 
D)  sellers pay the full amount if demand is perfectly elastic. 
A)  buyers pay the full amount if demand is perfectly elastic. 
B)  buyers pay the full amount if supply is perfectly inelastic. 
C)  sellers pay the full amount if supply is perfectly elastic. 
D)  sellers pay the full amount if demand is perfectly elastic.

Question 8

-In the figure above, imposing a tax on the product results in a division in which

Accepted Answer

A)  all of the tax is paid by the buyers. 
B)  all of the tax is paid by the sellers. 
C)  the buyers and sellers pay the same amount. 
D)  neither the buyers nor the sellers pay the tax. 
A)  all of the tax is paid by the buyers. 
B)  all of the tax is paid by the sellers. 
C)  the buyers and sellers pay the same amount. 
D)  neither the buyers nor the sellers pay the tax.

Question 9

-The above figure shows the market for anti-freeze. The government imposes the sales tax shown in the figure on sellers. Anti-freeze sellers would pay a larger part of this tax than what is shown in the figure if the

Accepted Answer

A)  demand were more inelastic. 
B)  demand curve were steeper. 
C)  supply were more inelastic. 
D)  supply were more elastic. 
A)  demand were more inelastic. 
B)  demand curve were steeper. 
C)  supply were more inelastic. 
D)  supply were more elastic.

Question 10

-In the above figure, if there is no minimum wage, the equilibrium employment is ________; if the government imposed a minimum wage of $8 per hour, employment is ________.

Accepted Answer

A)  4,000 hours; 2,000 hours 
B)  3,000 hours; 4,000 hours 
C)  3,000 hours; 2,000 hours 
D)  4,000 hours; 3,000 hours 
A)  4,000 hours; 2,000 hours 
B)  3,000 hours; 4,000 hours 
C)  3,000 hours; 2,000 hours 
D)  4,000 hours; 3,000 hours

Question 11

-To help pay for the cost of sport related injuries, the government imposes a tax on sellers of all sports equipment. The deadweight loss created by this tax would be greater than shown in the figure above if

Accepted Answer

A)  the demand were more elastic. 
B)  the supply were more elastic. 
C)  neither of the above. 
D)  both A and B above. 
A)  the demand were more elastic. 
B)  the supply were more elastic. 
C)  neither of the above. 
D)  both A and B above.

Question 12

-In the figure above, if a minimum wage of $6 per hour has been imposed and the labor demand curve then shifts from D0 to D1 the wage rate ________ and the amount of employment ________.

Accepted Answer

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

Question 13

A minimum wage set above the equilibrium wage rate is a price ________ that ________ the quantity of low-skilled labor demanded.

Accepted Answer

A)  ceiling; decreases 
B)  ceiling; increases 
C)  floor; decreases 
D)  floor; increases 
A)  ceiling; decreases 
B)  ceiling; increases 
C)  floor; decreases 
D)  floor; increases

Question 14

The black market price for a legally prohibited good will be the same whether a $1,000 fine is placed on the buyer or the seller.

Accepted Answer

A) True 
 B)False

Question 15

Suppose the demand for wine is elastic and that initially 5 million bottles of wine are produced and consumed in the United States. If the government imposes a tax of $2 per bottle of wine, the government will collect

Accepted Answer

A)  more than $10 million in tax revenues. 
B)  $10 million in tax revenues. 
C)  less than $10 million in tax revenues. 
D)  an amount that may be more than, equal to, or less than $10 million in tax revenues depending on the precise elasticity of demand. 
A)  more than $10 million in tax revenues. 
B)  $10 million in tax revenues. 
C)  less than $10 million in tax revenues. 
D)  an amount that may be more than, equal to, or less than $10 million in tax revenues depending on the precise elasticity of demand.

Question 16

A sales tax is imposed on the sellers of gasoline. This tax shifts

Accepted Answer

A)  the supply of gasoline curve leftward. 
B)  the supply of gasoline curve rightward. 
C)  the demand for gasoline curve leftward. 
D)  both the supply curve of gasoline and demand curve for gasoline leftward. 
A)  the supply of gasoline curve leftward. 
B)  the supply of gasoline curve rightward. 
C)  the demand for gasoline curve leftward. 
D)  both the supply curve of gasoline and demand curve for gasoline leftward.

Question 17

"The tax on insulin in the Philippines is anywhere between 10 and 20 percent. If you are rich and living in the Philippines, this is not a problem, but if you are poor, then insulin becomes something that you cannot afford." Why do buyers care so much about a tax on insulin, a vital daily medicine for those with diabetes?

Accepted Answer

A)  because buyers pay virtually the entire tax on insulin because the demand is almost perfectly inelastic 
B)  because sellers increase their profit when there is a tax 
C)  because more insulin can be provided to those in need 
D)  because the tax incidence is equal between the buyers and sellers 
A)  because buyers pay virtually the entire tax on insulin because the demand is almost perfectly inelastic 
B)  because sellers increase their profit when there is a tax 
C)  because more insulin can be provided to those in need 
D)  because the tax incidence is equal between the buyers and sellers

Question 18

-In the figure above, D0 is the demand for labor curve. Imposing a minimum wage of $3 per hour will

Accepted Answer

A)  have no effect on the market. 
B)  result in unemployment. 
C)  result in a labor shortage. 
D)  immediately shift the demand curve to D1. 
A)  have no effect on the market. 
B)  result in unemployment. 
C)  result in a labor shortage. 
D)  immediately shift the demand curve to D1.

Question 19

What are the effects of a rent ceiling set below the equilibrium rent?

Accepted Answer

A rent ceiling is the maximum legal rent

Question 20

________ is an illegal activity between buyers and sellers sometimes used to evade a price ceiling.

Accepted Answer

A)  Increased search activity 
B)  A price floor 
C)  Creating a shortage 
D)  A black market 
A)  Increased search activity 
B)  A price floor 
C)  Creating a shortage 
D)  A black market

A rent ceiling set above the equilibrium rent has no effect.

-The figure above shows the market for cotton in Georgestan. The government regulates the market with a production quota set at 8 million pounds per year. The price of cotton in Georgestan is

-In the figure above, the demand curve shifts rightward from D₀ to D₁ so that D₁ is the relevant demand curve. Suppose the government imposes a rent ceiling of $300 per month. In the short run there will be

A rent ceiling set above the equilibrium rent efficiently allocates resources in the housing market.

What is search activity and how does it influence consumer surplus when a rent ceiling creates a housing shortage?

-The above figure shows the demand and supply curves for housing As a result of a rent ceiling at $500, the deadweight loss is represented by the area

A sales tax is divided so that the

-In the figure above, imposing a tax on the product results in a division in which

-The above figure shows the market for anti-freeze. The government imposes the sales tax shown in the figure on sellers. Anti-freeze sellers would pay a larger part of this tax than what is shown in the figure if the

-In the above figure, if there is no minimum wage, the equilibrium employment is ; if the government imposed a minimum wage of $8 per hour, employment is .

-To help pay for the cost of sport related injuries, the government imposes a tax on sellers of all sports equipment. The deadweight loss created by this tax would be greater than shown in the figure above if

-In the figure above, if a minimum wage of $6 per hour has been imposed and the labor demand curve then shifts from D₀ to D₁ the wage rate and the amount of employment .

A minimum wage set above the equilibrium wage rate is a price that the quantity of low-skilled labor demanded.

The black market price for a legally prohibited good will be the same whether a $1,000 fine is placed on the buyer or the seller.

Suppose the demand for wine is elastic and that initially 5 million bottles of wine are produced and consumed in the United States. If the government imposes a tax of $2 per bottle of wine, the government will collect

A sales tax is imposed on the sellers of gasoline. This tax shifts

-In the figure above, D₀ is the demand for labor curve. Imposing a minimum wage of $3 per hour will

What are the effects of a rent ceiling set below the equilibrium rent?

________ is an illegal activity between buyers and sellers sometimes used to evade a price ceiling.

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

A rent ceiling set above the equilibrium rent has no effect.

-The figure above shows the market for cotton in Georgestan. The government regulates the market with a production quota set at 8 million pounds per year. The price of cotton in Georgestan is

-In the figure above, the demand curve shifts rightward from D0 to D1 so that D1 is the relevant demand curve. Suppose the government imposes a rent ceiling of $300 per month. In the short run there will be

A rent ceiling set above the equilibrium rent efficiently allocates resources in the housing market.

What is search activity and how does it influence consumer surplus when a rent ceiling creates a housing shortage?

-The above figure shows the demand and supply curves for housing As a result of a rent ceiling at $500, the deadweight loss is represented by the area

A sales tax is divided so that the

-In the figure above, imposing a tax on the product results in a division in which

-The above figure shows the market for anti-freeze. The government imposes the sales tax shown in the figure on sellers. Anti-freeze sellers would pay a larger part of this tax than what is shown in the figure if the

-In the above figure, if there is no minimum wage, the equilibrium employment is ________; if the government imposed a minimum wage of $8 per hour, employment is ________.

-To help pay for the cost of sport related injuries, the government imposes a tax on sellers of all sports equipment. The deadweight loss created by this tax would be greater than shown in the figure above if

-In the figure above, if a minimum wage of $6 per hour has been imposed and the labor demand curve then shifts from D0 to D1 the wage rate ________ and the amount of employment ________.

A minimum wage set above the equilibrium wage rate is a price ________ that ________ the quantity of low-skilled labor demanded.

The black market price for a legally prohibited good will be the same whether a $1,000 fine is placed on the buyer or the seller.

Suppose the demand for wine is elastic and that initially 5 million bottles of wine are produced and consumed in the United States. If the government imposes a tax of $2 per bottle of wine, the government will collect

A sales tax is imposed on the sellers of gasoline. This tax shifts

-In the figure above, D0 is the demand for labor curve. Imposing a minimum wage of $3 per hour will

What are the effects of a rent ceiling set below the equilibrium rent?

________ is an illegal activity between buyers and sellers sometimes used to evade a price ceiling.

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 figure above, the demand curve shifts rightward from D₀ to D₁ so that D₁ is the relevant demand curve. Suppose the government imposes a rent ceiling of $300 per month. In the short run there will be

-In the above figure, if there is no minimum wage, the equilibrium employment is ; if the government imposed a minimum wage of $8 per hour, employment is .

-In the figure above, if a minimum wage of $6 per hour has been imposed and the labor demand curve then shifts from D₀ to D₁ the wage rate and the amount of employment .

A minimum wage set above the equilibrium wage rate is a price that the quantity of low-skilled labor demanded.

-In the figure above, D₀ is the demand for labor curve. Imposing a minimum wage of $3 per hour will