Question 1

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 B

Question 2

A price support directly sets the

Accepted Answer

A) amount of production. 
B) subsidy the government must receive from producers. 
C) equilibrium quantity. 
D) lowest price for which the good may be sold. 
E) highest price for which the good may be sold. 
A) amount of production. 
B) subsidy the government must receive from producers. 
C) equilibrium quantity. 
D) lowest price for which the good may be sold. 
E) highest price for which the good may be sold. D

Question 3

A housing shortage results when

Accepted Answer

A) a tax is imposed on housing. 
B) a rent ceiling below the equilibrium rent is imposed. 
C) a rent ceiling above the equilibrium rent is imposed. 
D) rents rise. 
E) a rent floor below the equilibrium rent is imposed. 
A) a tax is imposed on housing. 
B) a rent ceiling below the equilibrium rent is imposed. 
C) a rent ceiling above the equilibrium rent is imposed. 
D) rents rise. 
E) a rent floor below the equilibrium rent is imposed. B

Question 4

If a price ceiling is introduced in the market for milk below the market equilibrium price,then the producer surplus made by dairy farmers

Accepted Answer

A) will increase. 
B) will decrease. 
C) will not change. 
D) might increase or decrease depending on whether the demand for milk increases or decreases. 
E) might increase or decrease depending on whether the supply of milk decreases or increases. 
A) will increase. 
B) will decrease. 
C) will not change. 
D) might increase or decrease depending on whether the demand for milk increases or decreases. 
E) might increase or decrease depending on whether the supply of milk decreases or increases.

Question 5

If a tax is placed on tires,then
I.the equilibrium quantity of tires will decrease.
Ii.a deadweight loss will be created.
Iii.the producer surplus will decrease.

Accepted Answer

A) i only 
B) ii only 
C) i and iii 
D) i and ii 
E) i,ii,and iii 
A) i only 
B) ii only 
C) i and iii 
D) i and ii 
E) i,ii,and iii

Question 6

-The above figure shows a labor market with a minimum wage of $8 an hour.The deadweight loss equals the

Accepted Answer

A) area abc. 
B) distance ab. 
C) distance ad. 
D) area bad. 
E) area acd. 
A) area abc. 
B) distance ab. 
C) distance ad. 
D) area bad. 
E) area acd.

Question 7

A price floor set above the equilibrium price

Accepted Answer

A) creates a surplus. 
B) creates a shortage. 
C) creates excess demand. 
D) balances supply and demand. 
E) has no effect. 
A) creates a surplus. 
B) creates a shortage. 
C) creates excess demand. 
D) balances supply and demand. 
E) has no effect.

Question 8

Neither the supply of nor demand for a good is perfectly elastic or perfectly inelastic.So,imposing a tax on the good results in a ________ in the price paid by buyers and ________ in the equilibrium quantity.

Accepted Answer

A) rise;an increase 
B) rise;a decrease 
C) fall;an increase 
D) fall;a decrease 
E) rise;no change 
A) rise;an increase 
B) rise;a decrease 
C) fall;an increase 
D) fall;a decrease 
E) rise;no change

Question 9

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 $20 per ton,

Accepted Answer

A) marginal benefit exceeds marginal cost. 
B) the market becomes more efficient 
C) marginal cost decreases. 
D) the government must supply some cotton to offset the shortage that results. 
E) marginal cost exceeds marginal benefit. 
A) marginal benefit exceeds marginal cost. 
B) the market becomes more efficient 
C) marginal cost decreases. 
D) the government must supply some cotton to offset the shortage that results. 
E) marginal cost exceeds marginal benefit.

Question 10

Explain why in cities such as New York City that have rent ceiling laws,so many people who work in the city commute from outside the city.

Accepted Answer

Rent ceilings decrease the quantity supp

Question 11

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

Accepted Answer

A) $10 
B) $30 
C) $40 
D) $60 
E) None of the above answers is correct. 
A) $10 
B) $30 
C) $40 
D) $60 
E) None of the above answers is correct.

Question 12

The surplus created by a price floor will likely be

Accepted Answer

A) smaller if the good is a necessity. 
B) larger if the good is addictive. 
C) smaller if the good is a luxury. 
D) unaffected by the time that has elapsed since the price ceiling is implemented. 
E) None of the above answers is correct. 
A) smaller if the good is a necessity. 
B) larger if the good is addictive. 
C) smaller if the good is a luxury. 
D) unaffected by the time that has elapsed since the price ceiling is implemented. 
E) None of the above answers is correct.

Question 13

-The graph shows the labor market for teenagers in Atlanta.If the government sets a minimum wage of $6 an hour,then the maximum amount that a teenager would be willing to spend on job search is ________ an hour.

Accepted Answer

A) $2 
B) $4 
C) $5 
D) $6 
E) $3 
A) $2 
B) $4 
C) $5 
D) $6 
E) $3

Question 14

The figure above shows the supply and demand curves in the market for rental housing.A rent ceiling is set at $400 per month.
-As shown in the figure above,the rent ceiling

Accepted Answer

A) decreases consumer surplus. 
B) increases producer surplus. 
C) decreases deadweight loss. 
D) increases the quantity of housing rented. 
E) is efficient. 
A) decreases consumer surplus. 
B) increases producer surplus. 
C) decreases deadweight loss. 
D) increases the quantity of housing rented. 
E) is efficient.

Question 15

Who are minimum wages designed to help? Do they succeed? What is their effect on society?

Accepted Answer

Minimum wages are designed to improve th

Question 16

A price ceiling is a government regulation that makes it illegal to charge a price

Accepted Answer

A) below the equilibrium price. 
B) above the equilibrium price. 
C) for a good or service. 
D) above some specified level. 
E) below some specified level. 
A) below the equilibrium price. 
B) above the equilibrium price. 
C) for a good or service. 
D) above some specified level. 
E) below some specified level.

Question 17

-The above figure shows the market for finish carpenters in Bozeman.If there is a minimum wage set at $18,which of the following statements is true?

Accepted Answer

A) Firms' surplus increases with the minimum wage. 
B) Workers who retain their jobs have their wages rise. 
C) The market is efficient. 
D) The quantity supplied of workers is less that quantity demanded. 
E) Unemployment decreases because firms employ their workers more carefully. 
A) Firms' surplus increases with the minimum wage. 
B) Workers who retain their jobs have their wages rise. 
C) The market is efficient. 
D) The quantity supplied of workers is less that quantity demanded. 
E) Unemployment decreases because firms employ their workers more carefully.

Question 18

-The above figure shows the domestic market for tomatoes.Suppose this market is isolated from global competition and there is a support price set at $16.In this figure,what area equals the deadweight loss?

Accepted Answer

A) area B + area C + area D + area F 
B) area E 
C) area C + area D + area E + area G 
D) area A 
E) area F 
A) area B + area C + area D + area F 
B) area E 
C) area C + area D + area E + area G 
D) area A 
E) area F

Question 19

If the government imposes an effective ________,output decreases and ________ increases.

Accepted Answer

A) price support;consumer surplus 
B) price floor;consumer surplus 
C) price support;total revenue 
D) price floor;marginal benefit to consumers 
E) price ceiling;efficiency 
A) price support;consumer surplus 
B) price floor;consumer surplus 
C) price support;total revenue 
D) price floor;marginal benefit to consumers 
E) price ceiling;efficiency

Question 20

How does the elasticity of demand for labor affect the deadweight loss from an increase in the minimum wage? Why?

Accepted Answer

The more elastic the demand for labor,th

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

A price support directly sets the

A housing shortage results when

If a price ceiling is introduced in the market for milk below the market equilibrium price,then the producer surplus made by dairy farmers

If a tax is placed on tires,then I.the equilibrium quantity of tires will decrease. Ii.a deadweight loss will be created. Iii.the producer surplus will decrease.

-The above figure shows a labor market with a minimum wage of $8 an hour.The deadweight loss equals the

A price floor set above the equilibrium price

Neither the supply of nor demand for a good is perfectly elastic or perfectly inelastic.So,imposing a tax on the good results in a in the price paid by buyers and in the equilibrium quantity.

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 $20 per ton,

Explain why in cities such as New York City that have rent ceiling laws,so many people who work in the city commute from outside the city.

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

The surplus created by a price floor will likely be

-The graph shows the labor market for teenagers in Atlanta.If the government sets a minimum wage of $6 an hour,then the maximum amount that a teenager would be willing to spend on job search is ________ an hour.

The figure above shows the supply and demand curves in the market for rental housing.A rent ceiling is set at $400 per month. -As shown in the figure above,the rent ceiling

Who are minimum wages designed to help? Do they succeed? What is their effect on society?

A price ceiling is a government regulation that makes it illegal to charge a price

-The above figure shows the market for finish carpenters in Bozeman.If there is a minimum wage set at $18,which of the following statements is true?

-The above figure shows the domestic market for tomatoes.Suppose this market is isolated from global competition and there is a support price set at $16.In this figure,what area equals the deadweight loss?

If the government imposes an effective ,output decreases and increases.

How does the elasticity of demand for labor affect the deadweight loss from an increase in the minimum wage? Why?

Getting Started

The Usand 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

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

A price support directly sets the

A housing shortage results when

If a price ceiling is introduced in the market for milk below the market equilibrium price,then the producer surplus made by dairy farmers

If a tax is placed on tires,then I.the equilibrium quantity of tires will decrease. Ii.a deadweight loss will be created. Iii.the producer surplus will decrease.

-The above figure shows a labor market with a minimum wage of $8 an hour.The deadweight loss equals the

A price floor set above the equilibrium price

Neither the supply of nor demand for a good is perfectly elastic or perfectly inelastic.So,imposing a tax on the good results in a ________ in the price paid by buyers and ________ in the equilibrium quantity.

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 $20 per ton,

Explain why in cities such as New York City that have rent ceiling laws,so many people who work in the city commute from outside the city.

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

The surplus created by a price floor will likely be

-The graph shows the labor market for teenagers in Atlanta.If the government sets a minimum wage of $6 an hour,then the maximum amount that a teenager would be willing to spend on job search is ________ an hour.

The figure above shows the supply and demand curves in the market for rental housing.A rent ceiling is set at $400 per month. -As shown in the figure above,the rent ceiling

Who are minimum wages designed to help? Do they succeed? What is their effect on society?

A price ceiling is a government regulation that makes it illegal to charge a price

-The above figure shows the market for finish carpenters in Bozeman.If there is a minimum wage set at $18,which of the following statements is true?

-The above figure shows the domestic market for tomatoes.Suppose this market is isolated from global competition and there is a support price set at $16.In this figure,what area equals the deadweight loss?

If the government imposes an effective ________,output decreases and ________ increases.

How does the elasticity of demand for labor affect the deadweight loss from an increase in the minimum wage? Why?

Getting Started

The Usand 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.

Neither the supply of nor demand for a good is perfectly elastic or perfectly inelastic.So,imposing a tax on the good results in a in the price paid by buyers and in the equilibrium quantity.

If the government imposes an effective ,output decreases and increases.