Question 1

Suppose the equilibrium rent in Boston is $1,500.A rent ceiling of $1,600 per month leads to

Accepted Answer

A) a surplus of apartments in Boston. 
B) a shortage of apartments in Boston. 
C) no change in the Boston apartment market. 
D) fair prices in the Boston apartment market. 
E) compared to the situation at the equilibrium rent,a decrease in the quantity of apartments demanded and an increase in the quantity of apartments supplied. 
A) a surplus of apartments in Boston. 
B) a shortage of apartments in Boston. 
C) no change in the Boston apartment market. 
D) fair prices in the Boston apartment market. 
E) compared to the situation at the equilibrium rent,a decrease in the quantity of apartments demanded and an increase in the quantity of apartments supplied.

Question 2

-The above figure shows the market for biologists.The government decides to set a minimum wage for biologists of $18 per hour.After this minimum wage is in effect,and taking account of the resources lost in job search,workers' surplus equals ________.

Accepted Answer

A) $800 
B) $900 
C) $400 
D) $1,800 
E) $200 
A) $800 
B) $900 
C) $400 
D) $1,800 
E) $200

Question 3

The figure above shows supply and demand in the market for labor.The government introduces a minimum wage of $7 per hour.
-The figure above shows that the lowest wage rate for which someone is willing to work is

Accepted Answer

A) $3 an hour. 
B) $5 an hour. 
C) $6 an hour. 
D) $7 an hour. 
E) $4 an hour. 
A) $3 an hour. 
B) $5 an hour. 
C) $6 an hour. 
D) $7 an hour. 
E) $4 an hour.

Question 4

A rent ceiling creates a deadweight loss

Accepted Answer

A) if it is set below the equilibrium rent. 
B) if it is set equal to the equilibrium rent. 
C) if it set above the equilibrium rent. 
D) if it decreases the taxes the government collects in the housing market. 
E) never,because if it did create a deadweight loss,the government would not impose it. 
A) if it is set below the equilibrium rent. 
B) if it is set equal to the equilibrium rent. 
C) if it set above the equilibrium rent. 
D) if it decreases the taxes the government collects in the housing market. 
E) never,because if it did create a deadweight loss,the government would not impose it.

Question 5

When a product is taxed,

Accepted Answer

A) part of the initial consumer surplus goes to the government as revenue. 
B) part of the initial consumer surplus becomes a deadweight loss. 
C) the producer surplus never changes because consumers pay taxes,not producers. 
D) Both answers A and B are correct. 
E) Both answers B and C are correct. 
A) part of the initial consumer surplus goes to the government as revenue. 
B) part of the initial consumer surplus becomes a deadweight loss. 
C) the producer surplus never changes because consumers pay taxes,not producers. 
D) Both answers A and B are correct. 
E) Both answers B and C are correct.

Question 6

In a competitive labor market,a minimum wage law set above the equilibrium wage rate

Accepted Answer

A) creates a shortage of labor. 
B) causes equality between the quantity of labor supplied and the quantity demanded. 
C) creates a surplus of labor. 
D) lowers the wage rate paid to workers. 
E) has no impact. 
A) creates a shortage of labor. 
B) causes equality between the quantity of labor supplied and the quantity demanded. 
C) creates a surplus of labor. 
D) lowers the wage rate paid to workers. 
E) has no impact.

Question 7

If the minimum wage is above the equilibrium wage rate,then an increase in the minimum wage ________ employment and ________ unemployment.

Accepted Answer

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

Question 8

A rent ceiling set below the equilibrium rent

Accepted Answer

A) ensures the availability of enough low-rent apartments in a city. 
B) results in all renters and potential renters being better off. 
C) creates a situation in which the quantity demanded of housing is greater than quantity supplied. 
D) ensures that landlords earn a reasonable rate of profit on apartments. 
E) eliminates discrimination by landlords. 
A) ensures the availability of enough low-rent apartments in a city. 
B) results in all renters and potential renters being better off. 
C) creates a situation in which the quantity demanded of housing is greater than quantity supplied. 
D) ensures that landlords earn a reasonable rate of profit on apartments. 
E) eliminates discrimination by landlords.

Question 9

-The graph shows the labor market for fast-food workers in Sioux City.If the government sets a minimum wage of $7 an hour,then the labor market is ________,and marginal benefit ________ marginal cost.

Accepted Answer

A) inefficient;is less than 
B) inefficient;equals 
C) efficient;equals 
D) inefficient;is greater than 
E) inefficient;cannot be compared to 
A) inefficient;is less than 
B) inefficient;equals 
C) efficient;equals 
D) inefficient;is greater than 
E) inefficient;cannot be compared to

Question 10

Compare and contrast a price ceiling and a price floor.

Accepted Answer

A price ceiling is the maximum legal pri

Question 11

-The figure above shows the market for tires.According to the figure,the price elasticity of demand is ________ the price elasticity of supply.

Accepted Answer

A) greater than 
B) equal to 
C) less than 
D) not comparable to 
E) More information is needed to determine if the price elasticity of demand is greater than,equal to,less than,or comparable to the price elasticity of supply. 
A) greater than 
B) equal to 
C) less than 
D) not comparable to 
E) More information is needed to determine if the price elasticity of demand is greater than,equal to,less than,or comparable to the price elasticity of supply.

Question 12

Suppose the elasticity of supply of land is 0 and elasticity of demand is 2.If the government imposes a 10 percent tax on land,then

Accepted Answer

A) buyers and sellers each pay 5 percent of the tax. 
B) buyers pay all of the tax. 
C) sellers pay all of the tax. 
D) sellers pay a smaller share of the tax than do buyers but both buyers and sellers pay some of the tax. 
E) buyers pay 1/2 of the tax. 
A) buyers and sellers each pay 5 percent of the tax. 
B) buyers pay all of the tax. 
C) sellers pay all of the tax. 
D) sellers pay a smaller share of the tax than do buyers but both buyers and sellers pay some of the tax. 
E) buyers pay 1/2 of the tax.

Question 13

Which of the following is true?
I.A price ceiling set above the equilibrium price has no effects.
Ii.A price ceiling set below the equilibrium price creates a surplus.
Iii.A price floor set above the equilibrium price has no effects.

Accepted Answer

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

Question 14

The figure above shows supply and demand in the market for labor.The government introduces a minimum wage of $7 per hour.
-The figure above shows that the value of the resources used in job-search activity can be as large as ________ per hour.

Accepted Answer

A) $12,000 
B) $8,000 
C) $6,000 
D) $4,000 
E) $2,000 
A) $12,000 
B) $8,000 
C) $6,000 
D) $4,000 
E) $2,000

Question 15

-The labor demand and labor supply schedules are given in the table above.If a minimum wage of $9 per hour is imposed,

Accepted Answer

A) a surplus of 300 workers occurs. 
B) a shortage of 300 workers occurs. 
C) there is no surplus or shortage of workers. 
D) the quantity demanded is 1,000 workers. 
E) there is unemployment of 700 workers. 
A) a surplus of 300 workers occurs. 
B) a shortage of 300 workers occurs. 
C) there is no surplus or shortage of workers. 
D) the quantity demanded is 1,000 workers. 
E) there is unemployment of 700 workers.

Question 16

Black markets can occur when price ceilings are imposed in a market.Which of the following explains why sellers participate in a black market?

Accepted Answer

A) Sellers are able to sell the product for a higher than legal price. 
B) There are more buyers in the black market than in the legal market. 
C) The demand is perfectly elastic in a black market. 
D) The demand is perfectly inelastic in a black market. 
E) The surplus in the legal market means that many sellers can sell their product in the black market. 
A) Sellers are able to sell the product for a higher than legal price. 
B) There are more buyers in the black market than in the legal market. 
C) The demand is perfectly elastic in a black market. 
D) The demand is perfectly inelastic in a black market. 
E) The surplus in the legal market means that many sellers can sell their product in the black market.

Question 17

One result of the minimum wage is

Accepted Answer

A) a black market for labor that pays more than the minimum wage. 
B) a black market for labor that pays less than the minimum wage. 
C) decreased job search activity. 
D) a decrease in unemployment among poor and unskilled workers. 
E) an increase in employment among poor and unskilled workers. 
A) a black market for labor that pays more than the minimum wage. 
B) a black market for labor that pays less than the minimum wage. 
C) decreased job search activity. 
D) a decrease in unemployment among poor and unskilled workers. 
E) an increase in employment among poor and unskilled workers.

Question 18

The buyer will pay the entire tax levied on a good when the demand for the good is ________ or when the supply of the good is ________.

Accepted Answer

A) perfectly elastic;perfectly inelastic 
B) perfectly elastic;perfectly elastic 
C) perfectly inelastic;perfectly inelastic 
D) perfectly inelastic;perfectly elastic 
E) unit elastic;unit elastic 
A) perfectly elastic;perfectly inelastic 
B) perfectly elastic;perfectly elastic 
C) perfectly inelastic;perfectly inelastic 
D) perfectly inelastic;perfectly elastic 
E) unit elastic;unit elastic

Question 19

-The figure above illustrates the bagel market.Which of the following statements is correct?

Accepted Answer

A) With a price ceiling of $1.00 per bagel,the quantity demanded is equal to the quantity supplied. 
B) With a price ceiling of $3.00 per bagel,the quantity demanded is greater than the quantity supplied. 
C) With a price ceiling of $1.00 per bagel,there is a shortage of bagels. 
D) Answers A and B are correct. 
E) Answers B and C are correct. 
A) With a price ceiling of $1.00 per bagel,the quantity demanded is equal to the quantity supplied. 
B) With a price ceiling of $3.00 per bagel,the quantity demanded is greater than the quantity supplied. 
C) With a price ceiling of $1.00 per bagel,there is a shortage of bagels. 
D) Answers A and B are correct. 
E) Answers B and C are correct.

Question 20

If a rent ceiling is imposed that is less than the equilibrium rent,which of the following outcomes is most likely to occur?

Accepted Answer

A) reduced search activity 
B) black market activity 
C) a building boom 
D) a housing surplus 
E) None of the above answers is correct because to have an impact,the rent ceiling must be above the equilibrium rent. 
A) reduced search activity 
B) black market activity 
C) a building boom 
D) a housing surplus 
E) None of the above answers is correct because to have an impact,the rent ceiling must be above the equilibrium rent.

Suppose the equilibrium rent in Boston is $1,500.A rent ceiling of $1,600 per month leads to

-The above figure shows the market for biologists.The government decides to set a minimum wage for biologists of $18 per hour.After this minimum wage is in effect,and taking account of the resources lost in job search,workers' surplus equals ________.

The figure above shows supply and demand in the market for labor.The government introduces a minimum wage of $7 per hour. -The figure above shows that the lowest wage rate for which someone is willing to work is

A rent ceiling creates a deadweight loss

When a product is taxed,

In a competitive labor market,a minimum wage law set above the equilibrium wage rate

If the minimum wage is above the equilibrium wage rate,then an increase in the minimum wage employment and unemployment.

A rent ceiling set below the equilibrium rent

-The graph shows the labor market for fast-food workers in Sioux City.If the government sets a minimum wage of $7 an hour,then the labor market is ,and marginal benefit marginal cost.

Compare and contrast a price ceiling and a price floor.

-The figure above shows the market for tires.According to the figure,the price elasticity of demand is ________ the price elasticity of supply.

Suppose the elasticity of supply of land is 0 and elasticity of demand is 2.If the government imposes a 10 percent tax on land,then

Which of the following is true? I.A price ceiling set above the equilibrium price has no effects. Ii.A price ceiling set below the equilibrium price creates a surplus. Iii.A price floor set above the equilibrium price has no effects.

The figure above shows supply and demand in the market for labor.The government introduces a minimum wage of $7 per hour. -The figure above shows that the value of the resources used in job-search activity can be as large as ________ per hour.

-The labor demand and labor supply schedules are given in the table above.If a minimum wage of $9 per hour is imposed,

Black markets can occur when price ceilings are imposed in a market.Which of the following explains why sellers participate in a black market?

One result of the minimum wage is

The buyer will pay the entire tax levied on a good when the demand for the good is or when the supply of the good is .

-The figure above illustrates the bagel market.Which of the following statements is correct?

If a rent ceiling is imposed that is less than the equilibrium rent,which of the following outcomes is most likely to occur?

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

Suppose the equilibrium rent in Boston is $1,500.A rent ceiling of $1,600 per month leads to

-The above figure shows the market for biologists.The government decides to set a minimum wage for biologists of $18 per hour.After this minimum wage is in effect,and taking account of the resources lost in job search,workers' surplus equals ________.

The figure above shows supply and demand in the market for labor.The government introduces a minimum wage of $7 per hour. -The figure above shows that the lowest wage rate for which someone is willing to work is

A rent ceiling creates a deadweight loss

When a product is taxed,

In a competitive labor market,a minimum wage law set above the equilibrium wage rate

If the minimum wage is above the equilibrium wage rate,then an increase in the minimum wage ________ employment and ________ unemployment.

A rent ceiling set below the equilibrium rent

-The graph shows the labor market for fast-food workers in Sioux City.If the government sets a minimum wage of $7 an hour,then the labor market is ________,and marginal benefit ________ marginal cost.

Compare and contrast a price ceiling and a price floor.

-The figure above shows the market for tires.According to the figure,the price elasticity of demand is ________ the price elasticity of supply.

Suppose the elasticity of supply of land is 0 and elasticity of demand is 2.If the government imposes a 10 percent tax on land,then

Which of the following is true? I.A price ceiling set above the equilibrium price has no effects. Ii.A price ceiling set below the equilibrium price creates a surplus. Iii.A price floor set above the equilibrium price has no effects.

The figure above shows supply and demand in the market for labor.The government introduces a minimum wage of $7 per hour. -The figure above shows that the value of the resources used in job-search activity can be as large as ________ per hour.

-The labor demand and labor supply schedules are given in the table above.If a minimum wage of $9 per hour is imposed,

Black markets can occur when price ceilings are imposed in a market.Which of the following explains why sellers participate in a black market?

One result of the minimum wage is

The buyer will pay the entire tax levied on a good when the demand for the good is ________ or when the supply of the good is ________.

-The figure above illustrates the bagel market.Which of the following statements is correct?

If a rent ceiling is imposed that is less than the equilibrium rent,which of the following outcomes is most likely to occur?

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

If the minimum wage is above the equilibrium wage rate,then an increase in the minimum wage employment and unemployment.

-The graph shows the labor market for fast-food workers in Sioux City.If the government sets a minimum wage of $7 an hour,then the labor market is ,and marginal benefit marginal cost.

The buyer will pay the entire tax levied on a good when the demand for the good is or when the supply of the good is .