Question 1

If the minimum wage law sets a wage floor below the equilibrium wage in the market for unskilled labor,then the

Accepted Answer

A)  minimum wage will create a surplus of unskilled labor. 
B)  minimum wage will create a shortage of unskilled labor. 
C)  minimum wage will not impact the unskilled labor market. 
D)  unskilled labor market will change,but we cannot be certain how. 
A)  minimum wage will create a surplus of unskilled labor. 
B)  minimum wage will create a shortage of unskilled labor. 
C)  minimum wage will not impact the unskilled labor market. 
D)  unskilled labor market will change,but we cannot be certain how.

Question 2

-Refer to Exhibit 4-8.Suppose that wheat producers lobby the government for a price floor and receive one.This price floor is set at PF.What is the size of the consumers' surplus at PF?

Accepted Answer

A)  area 5 
B)  area 6 
C)  area 1 + 2 + 4 
D)  area 1 
A)  area 5 
B)  area 6 
C)  area 1 + 2 + 4 
D)  area 1

Question 3

-Refer to Exhibit 4-1.The number of units bought and sold at the price ceiling is

Accepted Answer

A)  75. 
B)  125. 
C)  175. 
D)  100. 
A)  75. 
B)  125. 
C)  175. 
D)  100.

Question 4

A tax placed on a good can make that good relatively more expensive and its substitutes relatively less expensive.

Accepted Answer

A) True 
 B)False

Question 5

-Refer to Exhibit 4-8.Suppose that wheat producers lobby the government for a price floor and receive one.This price floor is set at PF.What has happened to the producers' surplus as a result of the imposition of the price floor?

Accepted Answer

A)  Producers' surplus has risen by (area 2 + 3) 
B)  Producers' surplus has fallen by (area 4 + 5) 
C)  Producers' surplus has changed by (area 3 - area 5) 
D)  Producers' surplus has changed by (area 2 - area 5) 
A)  Producers' surplus has risen by (area 2 + 3) 
B)  Producers' surplus has fallen by (area 4 + 5) 
C)  Producers' surplus has changed by (area 3 - area 5) 
D)  Producers' surplus has changed by (area 2 - area 5)

Question 6

-Refer to Exhibit 4-3.If price P2 is a price ceiling,then

Accepted Answer

A)  there is a shortage in the market for good X. 
B)  the highest price that can legally be charged in this market is P3. 
C)  the price at which exchange legally takes place in the market for good X is P2. 
D)  the quantity exchanged is less than the quantity demanded. 
E)  all of the above 
A)  there is a shortage in the market for good X. 
B)  the highest price that can legally be charged in this market is P3. 
C)  the price at which exchange legally takes place in the market for good X is P2. 
D)  the quantity exchanged is less than the quantity demanded. 
E)  all of the above

Question 7

-Refer to Exhibit 4-5.If a free market were allowed in the transplanted kidney market,then the equilibrium price would be P2.The number of kidneys transplanted would increase by _________ compared to the number transplanted at a price ceiling of P= $0.

Accepted Answer

A)  (Q3 - Q1) 
B)  (Q3 - Q2) 
C)  (Q2 - Q1) 
D)  Q2 
A)  (Q3 - Q1) 
B)  (Q3 - Q2) 
C)  (Q2 - Q1) 
D)  Q2

Question 8

In 1973 and 1979,the U.S.federal government imposed price ceilings on gasoline which resulted in surpluses of gasoline.

Accepted Answer

A) True 
 B)False

Question 9

​
​
-Refer to Exhibit 4-10.Suppose that the government imposes a minimum wage of $7.How many thousands of unskilled workers would be employed at the minimum wage?

Accepted Answer

A)  2 
B)  3 
C)  4 
D)  5 
E)  7 
A)  2 
B)  3 
C)  4 
D)  5 
E)  7

Question 10

-Refer to Exhibit 4-1.How many fewer units are bought and sold because of the price ceiling than would have been bought and sold at the equilibrium price?

Accepted Answer

A)  50 
B)  60 
C)  65 
D)  100 
A)  50 
B)  60 
C)  65 
D)  100

Question 11

A price ceiling set below the equilibrium price will

Accepted Answer

A)  clear the market for the good. 
B)  result in a shortage of the good. 
C)  result in a surplus of the good. 
D)  induce new firms to enter the industry. 
A)  clear the market for the good. 
B)  result in a shortage of the good. 
C)  result in a surplus of the good. 
D)  induce new firms to enter the industry.

Question 12

If the absolute price of a new car is $30,000 and the relative price of a laptop computer in terms of cars is 1/30 of a car,it follows that the absolute price of the laptop is

Accepted Answer

A)  $10,000. 
B)  $1,000. 
C)  $3,000. 
D)  $2,000. 
E)  $1,500. 
A)  $10,000. 
B)  $1,000. 
C)  $3,000. 
D)  $2,000. 
E)  $1,500.

Question 13

The number of unskilled workers employed before and after a change in the minimum wage is found to be the same.This means

Accepted Answer

A)  the minimum wage change did not affect the unskilled labor market. 
B)  nothing,unless we also know that the number of hours worked by each worker has not changed. 
C)  the minimum wage could be below the equilibrium wage for unskilled labor. 
D)  either b or c 
E)  none of the above 
A)  the minimum wage change did not affect the unskilled labor market. 
B)  nothing,unless we also know that the number of hours worked by each worker has not changed. 
C)  the minimum wage could be below the equilibrium wage for unskilled labor. 
D)  either b or c 
E)  none of the above

Question 14

Buyers always prefer lower prices to higher prices.

Accepted Answer

A) True 
 B)False

Question 15

What condition is necessary for a price ceiling to have an impact on a market? Describe at least three of the effects that a price ceiling can have on a market.Give a hypothetical numerical example to help support your answer.

Accepted Answer

In order for a price ceiling to have an

Question 16

-Refer to Exhibit 4-6.At a wage of $7,there will be a __________ of unskilled workers equal to __________ thousand workers.

Accepted Answer

A)  shortage; 10 
B)  surplus; 20 
C)  surplus; 10 
D)  shortage; 20 
E)  surplus; 15 
A)  shortage; 10 
B)  surplus; 20 
C)  surplus; 10 
D)  shortage; 20 
E)  surplus; 15

Question 17

7/30/2017 4:16 PM
  
-Refer to Situation 4-1.Because price controls were in effect at the time the embargo occurred,an economist would have most likely predicted that

Accepted Answer

A)  the number of dollars one would need to pay at the pump (legally)for a full tank of gasoline would increase sharply. 
B)  the number of dollars one would need to pay at the pump (legally)for a full tank of gasoline would decline sharply. 
C)  nonprice-rationing devices,such as long waiting lines and black markets,would appear. 
D)  a surplus of gasoline would result. 
A)  the number of dollars one would need to pay at the pump (legally)for a full tank of gasoline would increase sharply. 
B)  the number of dollars one would need to pay at the pump (legally)for a full tank of gasoline would decline sharply. 
C)  nonprice-rationing devices,such as long waiting lines and black markets,would appear. 
D)  a surplus of gasoline would result.

Question 18

-Refer to Exhibit 4-8.If the wheat market is in competitive equilibrium,the consumers' surplus will equal

Accepted Answer

A)  area 1 + 2 + 3 
B)  area 1 + 2 + 4 
C)  area 3 + 5 
D)  area 1 + 2 + 3 + 4 + 5 
E)  area 6 
A)  area 1 + 2 + 3 
B)  area 1 + 2 + 4 
C)  area 3 + 5 
D)  area 1 + 2 + 3 + 4 + 5 
E)  area 6

Question 19

-Refer to Exhibit 4-7.How many fewer persons work in the unskilled labor market at the minimum wage (WM)than at the equilibrium wage (W1)?

Accepted Answer

A)  (N2 - N1)persons 
B)  (N1 - N3)persons 
C)  (N2 - N3)persons 
D)  N3 persons 
E)  none of the above 
A)  (N2 - N1)persons 
B)  (N1 - N3)persons 
C)  (N2 - N3)persons 
D)  N3 persons 
E)  none of the above

Question 20

If the relative price of one unit of good Y is 0.25 units of good Z,then it follows that the absolute price of good Z can be __________ and the absolute price of good Y can be __________.

Accepted Answer

A)  $4,000; $2,000 
B)  $1,000; $2,000 
C)  $2,000; $1,000 
D)  a and c 
E)  none of the above 
A)  $4,000; $2,000 
B)  $1,000; $2,000 
C)  $2,000; $1,000 
D)  a and c 
E)  none of the above

Exam 4: Prices: Free,controlled,and Relative

If the minimum wage law sets a wage floor below the equilibrium wage in the market for unskilled labor,then the

-Refer to Exhibit 4-8.Suppose that wheat producers lobby the government for a price floor and receive one.This price floor is set at PF.What is the size of the consumers' surplus at PF?

-Refer to Exhibit 4-1.The number of units bought and sold at the price ceiling is

A tax placed on a good can make that good relatively more expensive and its substitutes relatively less expensive.

-Refer to Exhibit 4-8.Suppose that wheat producers lobby the government for a price floor and receive one.This price floor is set at PF.What has happened to the producers' surplus as a result of the imposition of the price floor?

-Refer to Exhibit 4-3.If price P2 is a price ceiling,then

-Refer to Exhibit 4-5.If a free market were allowed in the transplanted kidney market,then the equilibrium price would be P2.The number of kidneys transplanted would increase by _________ compared to the number transplanted at a price ceiling of P= $0.

In 1973 and 1979,the U.S.federal government imposed price ceilings on gasoline which resulted in surpluses of gasoline.

​ ​ -Refer to Exhibit 4-10.Suppose that the government imposes a minimum wage of $7.How many thousands of unskilled workers would be employed at the minimum wage?

-Refer to Exhibit 4-1.How many fewer units are bought and sold because of the price ceiling than would have been bought and sold at the equilibrium price?

A price ceiling set below the equilibrium price will

If the absolute price of a new car is $30,000 and the relative price of a laptop computer in terms of cars is 1/30 of a car,it follows that the absolute price of the laptop is

The number of unskilled workers employed before and after a change in the minimum wage is found to be the same.This means

Buyers always prefer lower prices to higher prices.

What condition is necessary for a price ceiling to have an impact on a market? Describe at least three of the effects that a price ceiling can have on a market.Give a hypothetical numerical example to help support your answer.

-Refer to Exhibit 4-6.At a wage of $7,there will be a __________ of unskilled workers equal to __________ thousand workers.

7/30/2017 4:16 PM -Refer to Situation 4-1.Because price controls were in effect at the time the embargo occurred,an economist would have most likely predicted that

-Refer to Exhibit 4-8.If the wheat market is in competitive equilibrium,the consumers' surplus will equal

-Refer to Exhibit 4-7.How many fewer persons work in the unskilled labor market at the minimum wage (WM)than at the equilibrium wage (W1)?

If the relative price of one unit of good Y is 0.25 units of good Z,then it follows that the absolute price of good Z can be __________ and the absolute price of good Y can be __________.

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Supply,demand,and Price: Applications

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,union,and Labor

The Distribution of Income and Poverty

Interest,rent,and Profit

Market Failure: Externalities, public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government: Five Topics Considered

Stocks,bonds,futures,and Options

Stocks,bonds,futures,and Options

Filters

-Refer to Exhibit 4-8.Suppose that wheat producers lobby the government for a price floor and receive one.This price floor is set at P_F.What is the size of the consumers' surplus at P_F?

-Refer to Exhibit 4-8.Suppose that wheat producers lobby the government for a price floor and receive one.This price floor is set at P_F.What has happened to the producers' surplus as a result of the imposition of the price floor?

-Refer to Exhibit 4-3.If price P₂ is a price ceiling,then

-Refer to Exhibit 4-5.If a free market were allowed in the transplanted kidney market,then the equilibrium price would be P₂.The number of kidneys transplanted would increase by _________ compared to the number transplanted at a price ceiling of P= $0.

-Refer to Exhibit 4-10.Suppose that the government imposes a minimum wage of $7.How many thousands of unskilled workers would be employed at the minimum wage?

-Refer to Exhibit 4-6.At a wage of $7,there will be a of unskilled workers equal to thousand workers.

-Refer to Exhibit 4-7.How many fewer persons work in the unskilled labor market at the minimum wage (W_M)than at the equilibrium wage (W₁)?

If the relative price of one unit of good Y is 0.25 units of good Z,then it follows that the absolute price of good Z can be and the absolute price of good Y can be .