Question 1

Opponents of the minimum wage point out that the minimum wage

Accepted Answer

A) encourages teenagers to drop out of school. 
B) prevents some workers from getting needed on-the-job training. 
C) contributes to the problem of unemployment. 
D) All of the above are correct. 
A) encourages teenagers to drop out of school. 
B) prevents some workers from getting needed on-the-job training. 
C) contributes to the problem of unemployment. 
D) All of the above are correct.

Question 2

Which of the following is the most likely explanation for the imposition of a price ceiling on the market for milk?

Accepted Answer

A) Policymakers have studied the effects of the price ceiling carefully,and they recognize that the price ceiling is advantageous for society as a whole. 
B) Buyers of milk,recognizing that the price ceiling is good for them,have pressured policymakers into imposing the price ceiling. 
C) Sellers of milk,recognizing that the price ceiling is good for them,have pressured policymakers into imposing the price ceiling. 
D) Buyers and sellers of milk have agreed that the price ceiling is good for both of them and have therefore pressured policymakers into imposing the price ceiling. 
A) Policymakers have studied the effects of the price ceiling carefully,and they recognize that the price ceiling is advantageous for society as a whole. 
B) Buyers of milk,recognizing that the price ceiling is good for them,have pressured policymakers into imposing the price ceiling. 
C) Sellers of milk,recognizing that the price ceiling is good for them,have pressured policymakers into imposing the price ceiling. 
D) Buyers and sellers of milk have agreed that the price ceiling is good for both of them and have therefore pressured policymakers into imposing the price ceiling.

Question 3

If a price floor is not binding,then

Accepted Answer

A) the equilibrium price is above the price floor. 
B) the equilibrium price is below the price floor. 
C) there will be a surplus in the market. 
D) there will be a shortage in the market. 
A) the equilibrium price is above the price floor. 
B) the equilibrium price is below the price floor. 
C) there will be a surplus in the market. 
D) there will be a shortage in the market.

Question 4

Figure 6-14  
-Refer to Figure 6-14.If the horizontal line on the graph represents a price ceiling,then the price ceiling is

Accepted Answer

A) binding and creates a shortage of 20 units of the good. 
B) binding and creates a shortage of 40 units of the good. 
C) not binding but creates a shortage of 40 units of the good. 
D) not binding,and there will be no surplus or shortage of the good. 
A) binding and creates a shortage of 20 units of the good. 
B) binding and creates a shortage of 40 units of the good. 
C) not binding but creates a shortage of 40 units of the good. 
D) not binding,and there will be no surplus or shortage of the good.

Question 5

Figure 6-6  
-Refer to Figure 6-6.In which of the following cases would sellers have to develop a rationing mechanism?

Accepted Answer

A) a price ceiling set at $8 
B) a price ceiling set at $6 
C) a price floor set at $8 
D) a price floor set at $6 
A) a price ceiling set at $8 
B) a price ceiling set at $6 
C) a price floor set at $8 
D) a price floor set at $6

Question 6

The minimum wage does not apply to

Accepted Answer

A) jobs for teenagers. 
B) jobs for members of minority groups. 
C) unpaid internships. 
D) jobs that include on-the-job training. 
A) jobs for teenagers. 
B) jobs for members of minority groups. 
C) unpaid internships. 
D) jobs that include on-the-job training.

Question 7

Which of the following would not interfere with market equilibria?

Accepted Answer

A) a minimum wage 
B) a rent control 
C) a non-binding price floor 
D) a binding price ceiling 
A) a minimum wage 
B) a rent control 
C) a non-binding price floor 
D) a binding price ceiling

Question 8

If a binding price floor is imposed on the video game market,then

Accepted Answer

A) the demand for video games will decrease. 
B) the supply of video games will increase. 
C) a surplus of video games will develop. 
D) All of the above are correct. 
A) the demand for video games will decrease. 
B) the supply of video games will increase. 
C) a surplus of video games will develop. 
D) All of the above are correct.

Question 9

Figure 6-2  
-Refer to Figure 6-2.The price ceiling

Accepted Answer

A) causes a shortage of 45 units of the good. 
B) makes it necessary for sellers to ration the good. 
C) is not binding because it is set below the equilibrium price. 
D) causes a shortage of 40 units of the good. 
A) causes a shortage of 45 units of the good. 
B) makes it necessary for sellers to ration the good. 
C) is not binding because it is set below the equilibrium price. 
D) causes a shortage of 40 units of the good.

Question 10

Consider the US market for chocolate,a market in which the government has imposed a price ceiling.Which of the following events could convert the price ceiling from a nonbinding to a binding price ceiling?

Accepted Answer

A) ​a government study that shows that consuming chocolate increases the incidence of cancer. 
B) ​a large increase in the size of the cocoa bean crop;cocoa beans are used to produce chocolate. 
C) ​South American cocoa bean producers refuse to ship to chocolate producers in the US. 
D) ​a sharp drop in consumer income;chocolate is a normal good. 
A) ​a government study that shows that consuming chocolate increases the incidence of cancer. 
B) ​a large increase in the size of the cocoa bean crop;cocoa beans are used to produce chocolate. 
C) ​South American cocoa bean producers refuse to ship to chocolate producers in the US. 
D) ​a sharp drop in consumer income;chocolate is a normal good.

Question 11

Figure 6-7  
-Refer to Figure 6-7.For a price floor to be binding in this market,it would have to be set at

Accepted Answer

A) any price below $7. 
B) any price below $3. 
C) any price below $9. 
D) any price above $7. 
A) any price below $7. 
B) any price below $3. 
C) any price below $9. 
D) any price above $7.

Question 12

If a nonbinding price floor is imposed on a market,then the

Accepted Answer

A) quantity sold in the market will decrease. 
B) quantity sold in the market will stay the same. 
C) price in the market will increase. 
D) price in the market will decrease. 
A) quantity sold in the market will decrease. 
B) quantity sold in the market will stay the same. 
C) price in the market will increase. 
D) price in the market will decrease.

Question 13

The minimum wage

Accepted Answer

A) is an example of a price ceiling. 
B) has its greatest impact on middle-aged and immigrant workers. 
C) does not apply to unpaid internships. 
D) does not affect the quantity of labor demanded;it only affects the quantity of labor supplied. 
A) is an example of a price ceiling. 
B) has its greatest impact on middle-aged and immigrant workers. 
C) does not apply to unpaid internships. 
D) does not affect the quantity of labor demanded;it only affects the quantity of labor supplied.

Question 14

Figure 6-10  
-Refer to Figure 6-10.A price floor set at

Accepted Answer

A) $6 will be binding and will result in a surplus of 10 units. 
B) $6 will be binding and will result in a surplus of 6 units. 
C) $16 will be binding and will result in a surplus of 10 units. 
D) $16 will be binding and will result in a surplus of 4 units. 
A) $6 will be binding and will result in a surplus of 10 units. 
B) $6 will be binding and will result in a surplus of 6 units. 
C) $16 will be binding and will result in a surplus of 10 units. 
D) $16 will be binding and will result in a surplus of 4 units.

Question 15

Figure 6-9  
-Refer to Figure 6-9.At which price would a price ceiling be binding?

Accepted Answer

A) $8 
B) $5 
C) $6 
D) $7 
A) $8 
B) $5 
C) $6 
D) $7

Question 16

Figure 6-5  
-Refer to Figure 6-5.Suppose the market is initially in equilibrium.Then the government imposes a price control,as represented by the solid horizontal line on the graph.If the price control is a price floor,then the price control

Accepted Answer

A) causes the quantity demanded to decrease by 50 units,relative to the initial equilibrium. 
B) causes the quantity supplied to increase by 40 units,relative to the initial equilibrium. 
C) means that some firms will not be able to sell all that they want 
D) All of the above are correct. 
A) causes the quantity demanded to decrease by 50 units,relative to the initial equilibrium. 
B) causes the quantity supplied to increase by 40 units,relative to the initial equilibrium. 
C) means that some firms will not be able to sell all that they want 
D) All of the above are correct.

Question 17

Figure 6-2  
-Refer to Figure 6-2.The price ceiling causes quantity

Accepted Answer

A) supplied to exceed quantity demanded by 45 units. 
B) supplied to exceed quantity demanded by 85 units. 
C) demanded to exceed quantity supplied by 45 units. 
D) demanded to exceed quantity supplied by 85 units. 
A) supplied to exceed quantity demanded by 45 units. 
B) supplied to exceed quantity demanded by 85 units. 
C) demanded to exceed quantity supplied by 45 units. 
D) demanded to exceed quantity supplied by 85 units.

Question 18

A price floor is

Accepted Answer

A) a legal minimum on the price at which a good can be sold. 
B) often imposed when sellers of a good are successful in their attempts to convince the government that the market outcome is unfair without a price floor. 
C) a source of inefficiency in a market. 
D) All of the above are correct. 
A) a legal minimum on the price at which a good can be sold. 
B) often imposed when sellers of a good are successful in their attempts to convince the government that the market outcome is unfair without a price floor. 
C) a source of inefficiency in a market. 
D) All of the above are correct.

Question 19

The minimum wage has its greatest impact on the market for

Accepted Answer

A) female labor. 
B) older labor. 
C) black labor. 
D) teenage labor. 
A) female labor. 
B) older labor. 
C) black labor. 
D) teenage labor.

Question 20

An alternative to rent-control laws that would not reduce the quantity of housing supplied is

Accepted Answer

A) the payment by government of a fraction of a poor family's rent. 
B) higher taxes on rental income earned by landlords. 
C) a policy that prevents landlords from evicting tenants. 
D) a policy that allows government to confiscate residential property for the purpose of commercial development. 
A) the payment by government of a fraction of a poor family's rent. 
B) higher taxes on rental income earned by landlords. 
C) a policy that prevents landlords from evicting tenants. 
D) a policy that allows government to confiscate residential property for the purpose of commercial development.

Exam 6: Supply Demand and Government Policies: Controls on Prices

Opponents of the minimum wage point out that the minimum wage

Which of the following is the most likely explanation for the imposition of a price ceiling on the market for milk?

If a price floor is not binding,then

Figure 6-14 -Refer to Figure 6-14.If the horizontal line on the graph represents a price ceiling,then the price ceiling is

Figure 6-6 -Refer to Figure 6-6.In which of the following cases would sellers have to develop a rationing mechanism?

The minimum wage does not apply to

Which of the following would not interfere with market equilibria?

If a binding price floor is imposed on the video game market,then

Figure 6-2 -Refer to Figure 6-2.The price ceiling

Consider the US market for chocolate,a market in which the government has imposed a price ceiling.Which of the following events could convert the price ceiling from a nonbinding to a binding price ceiling?

Figure 6-7 -Refer to Figure 6-7.For a price floor to be binding in this market,it would have to be set at

If a nonbinding price floor is imposed on a market,then the

The minimum wage

Figure 6-10 -Refer to Figure 6-10.A price floor set at

Figure 6-9 -Refer to Figure 6-9.At which price would a price ceiling be binding?

Figure 6-5 -Refer to Figure 6-5.Suppose the market is initially in equilibrium.Then the government imposes a price control,as represented by the solid horizontal line on the graph.If the price control is a price floor,then the price control

Figure 6-2 -Refer to Figure 6-2.The price ceiling causes quantity

A price floor is

The minimum wage has its greatest impact on the market for

An alternative to rent-control laws that would not reduce the quantity of housing supplied is

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion

Application International Trade: Part A