Question 1

If the demand curve for a good is horizontal,a tax is levied on this product is

Accepted Answer

A) split between the buyers and the sellers but not evenly so that either the buyer or the seller pays more. 
B) split evenly between the buyers and the sellers. 
C) paid entirely by buyers. 
D) paid entirely by sellers. 
E) not paid by either the buyers or the sellers. 
A) split between the buyers and the sellers but not evenly so that either the buyer or the seller pays more. 
B) split evenly between the buyers and the sellers. 
C) paid entirely by buyers. 
D) paid entirely by sellers. 
E) not paid by either the buyers or the sellers.

Question 2

The figure above shows the market for sugar beets.The government intervenes in this market and sets a support price at $35 a ton.
-In the figure above,the quantity of sugar beets produced is ________ million tons per year,and the quantity bought by consumers is ________ million tons per year.

Accepted Answer

A) 30;20 
B) 20;30 
C) 25;20 
D) 20;25 
E) 25;25 
A) 30;20 
B) 20;30 
C) 25;20 
D) 20;25 
E) 25;25

Question 3

When a rent ceiling law is passed in a city,which of the following occurs?

Accepted Answer

A) The total price of renting an apartment decreases to all renters. 
B) The quantity of apartments supplied does not change. 
C) Some landlords and renters use methods such as "key money" to get around the rent ceiling law. 
D) Renters have no trouble finding a nice,reasonably priced apartment to rent. 
E) Generally the number of renters in the city increases because people move to the city to take advantage of the low-rent apartments. 
A) The total price of renting an apartment decreases to all renters. 
B) The quantity of apartments supplied does not change. 
C) Some landlords and renters use methods such as "key money" to get around the rent ceiling law. 
D) Renters have no trouble finding a nice,reasonably priced apartment to rent. 
E) Generally the number of renters in the city increases because people move to the city to take advantage of the low-rent apartments.

Question 4

The supply of oil is more elastic than the demand for oil.If oil is taxed $10 per barrel,how will the tax be divided between the buyer and seller?

Accepted Answer

A) The seller will pay more of the tax than the buyer pays. 
B) The buyer will pay more of the tax than the seller pays. 
C) The seller and buyer will split the tax evenly. 
D) The seller will pay the entire tax. 
E) The buyer will pay the entire tax. 
A) The seller will pay more of the tax than the buyer pays. 
B) The buyer will pay more of the tax than the seller pays. 
C) The seller and buyer will split the tax evenly. 
D) The seller will pay the entire tax. 
E) The buyer will pay the entire tax.

Question 5

-The above figure shows a labor market.Before the minimum wage of $8 an hour is imposed,employment equals ________ workers;after the minimum wage of $8 an hour is imposed,employment equals ________ workers.

Accepted Answer

A) 80,000;40,000 
B) 40,000;80,000 
C) 60,000;40,000 
D) 60,000;80,000 
E) 80,000;60,000 
A) 80,000;40,000 
B) 40,000;80,000 
C) 60,000;40,000 
D) 60,000;80,000 
E) 80,000;60,000

Question 6

When a rent ceiling below the equilibrium rent is put in place,the outcome is

Accepted Answer

A) efficient because marginal benefit equals marginal cost. 
B) inefficient because marginal benefit equals marginal cost. 
C) inefficient because marginal benefit is greater than marginal cost. 
D) inefficient because marginal benefit is less than marginal cost. 
E) efficient because marginal benefit is greater than marginal cost. 
A) efficient because marginal benefit equals marginal cost. 
B) inefficient because marginal benefit equals marginal cost. 
C) inefficient because marginal benefit is greater than marginal cost. 
D) inefficient because marginal benefit is less than marginal cost. 
E) efficient because marginal benefit is greater than marginal cost.

Question 7

-The above figure shows the market for buckets of golf balls at the driving range.A new leisure time tax is placed on suppliers in this market,shifting the supply curve from S0 to S1.The quantity of buckets without the tax is ________ and the quantity with the tax is ________.

Accepted Answer

A) 400;600 
B) 600;400 
C) 400;400 
D) 800;500 
E) 600;500 
A) 400;600 
B) 600;400 
C) 400;400 
D) 800;500 
E) 600;500

Question 8

The figure above shows the market for sugar beets.The government intervenes in this market and sets a support price at $35 a ton.
-The figure above shows that the deadweight loss from the government's policy is

Accepted Answer

A) about $350 million. 
B) about $25 million. 
C) about $50 million. 
D) about $100 million. 
E) zero. 
A) about $350 million. 
B) about $25 million. 
C) about $50 million. 
D) about $100 million. 
E) zero.

Question 9

Who gains from a price support? Who loses? Explain how the size of the gain compares to the size of the loss.

Accepted Answer

Producers gain from a price support beca

Question 10

-The table above gives the demand and supply schedules for the housing market in a small town.If a rent ceiling of $600 a month is imposed,what is the quantity demanded,the quantity supplied,and the shortage of housing?

Accepted Answer

The quantity demanded is 350 u

Question 11

A price floor is considered

Accepted Answer

A) "fair" based only on the fair results view. 
B) "fair" based only on the fair rules view. 
C) "unfair" based on both the fair results and fair rules views. 
D) "unfair" based only on the fair results view. 
E) "fair" based on the fair results view and on the fair rules view. 
A) "fair" based only on the fair results view. 
B) "fair" based only on the fair rules view. 
C) "unfair" based on both the fair results and fair rules views. 
D) "unfair" based only on the fair results view. 
E) "fair" based on the fair results view and on the fair rules view.

Question 12

In a housing market with a rent ceiling below the equilibrium rent,apartment seekers spend more time searching for an apartment than they would in a housing market without a rent ceiling.Why does this difference exist?

Accepted Answer

A) In the market with the rent ceiling,renters are searching for the best buy in apartments. 
B) In the market with the rent ceiling,there is a wide variety in the quality of apartments for rent. 
C) In the market with the rent ceiling,the quantity of housing demanded is greater than quantity supplied at the ceiling price. 
D) The premise of the question is incorrect because people spend less time searching with a rent ceiling since they no longer need to look for a low-priced apartment. 
E) The premise of the question is incorrect because there is no difference in the search time between a market with a rent ceiling and one without a ceiling. 
A) In the market with the rent ceiling,renters are searching for the best buy in apartments. 
B) In the market with the rent ceiling,there is a wide variety in the quality of apartments for rent. 
C) In the market with the rent ceiling,the quantity of housing demanded is greater than quantity supplied at the ceiling price. 
D) The premise of the question is incorrect because people spend less time searching with a rent ceiling since they no longer need to look for a low-priced apartment. 
E) The premise of the question is incorrect because there is no difference in the search time between a market with a rent ceiling and one without a ceiling.

Question 13

-The above figure shows the market for 2 bedroom town homes in San Diego.If a rent ceiling is set at $1,000 per month,what is the maximum rent someone is willing to pay in the black market?

Accepted Answer

A) $1,300 per month 
B) $1,000 per month 
C) $900 per month 
D) $1,100 per month 
E) $1,400 per month 
A) $1,300 per month 
B) $1,000 per month 
C) $900 per month 
D) $1,100 per month 
E) $1,400 per month

Question 14

If a rent ceiling is set below the equilibrium price,thus creating a ________,housing may be allocated by increasing search activity or creating a ________.

Accepted Answer

A) shortage;black market 
B) shortage;free market 
C) surplus;black market 
D) surplus;open market 
E) surplus;free market 
A) shortage;black market 
B) shortage;free market 
C) surplus;black market 
D) surplus;open market 
E) surplus;free market

Question 15

A price support leads to inefficiency because

Accepted Answer

A) output is more than the efficient,equilibrium quantity. 
B) the marginal benefit of the last unit produced is larger than the marginal cost. 
C) the price charged is less than the equilibrium price. 
D) producer surplus is less than consumer surplus. 
E) producers must pay a subsidy to the government. 
A) output is more than the efficient,equilibrium quantity. 
B) the marginal benefit of the last unit produced is larger than the marginal cost. 
C) the price charged is less than the equilibrium price. 
D) producer surplus is less than consumer surplus. 
E) producers must pay a subsidy to the government.

If the demand curve for a good is horizontal,a tax is levied on this product is

The figure above shows the market for sugar beets.The government intervenes in this market and sets a support price at $35 a ton. -In the figure above,the quantity of sugar beets produced is million tons per year,and the quantity bought by consumers is million tons per year.

When a rent ceiling law is passed in a city,which of the following occurs?

The supply of oil is more elastic than the demand for oil.If oil is taxed $10 per barrel,how will the tax be divided between the buyer and seller?

-The above figure shows a labor market.Before the minimum wage of $8 an hour is imposed,employment equals workers;after the minimum wage of $8 an hour is imposed,employment equals workers.

When a rent ceiling below the equilibrium rent is put in place,the outcome is

-The above figure shows the market for buckets of golf balls at the driving range.A new leisure time tax is placed on suppliers in this market,shifting the supply curve from S0 to S1.The quantity of buckets without the tax is and the quantity with the tax is .

The figure above shows the market for sugar beets.The government intervenes in this market and sets a support price at $35 a ton. -The figure above shows that the deadweight loss from the government's policy is

Who gains from a price support? Who loses? Explain how the size of the gain compares to the size of the loss.

-The table above gives the demand and supply schedules for the housing market in a small town.If a rent ceiling of $600 a month is imposed,what is the quantity demanded,the quantity supplied,and the shortage of housing?

A price floor is considered

In a housing market with a rent ceiling below the equilibrium rent,apartment seekers spend more time searching for an apartment than they would in a housing market without a rent ceiling.Why does this difference exist?

-The above figure shows the market for 2 bedroom town homes in San Diego.If a rent ceiling is set at $1,000 per month,what is the maximum rent someone is willing to pay in the black market?

If a rent ceiling is set below the equilibrium price,thus creating a ,housing may be allocated by increasing search activity or creating a .

A price support leads to inefficiency because

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

If the demand curve for a good is horizontal,a tax is levied on this product is

The figure above shows the market for sugar beets.The government intervenes in this market and sets a support price at $35 a ton. -In the figure above,the quantity of sugar beets produced is ________ million tons per year,and the quantity bought by consumers is ________ million tons per year.

When a rent ceiling law is passed in a city,which of the following occurs?

The supply of oil is more elastic than the demand for oil.If oil is taxed $10 per barrel,how will the tax be divided between the buyer and seller?

-The above figure shows a labor market.Before the minimum wage of $8 an hour is imposed,employment equals ________ workers;after the minimum wage of $8 an hour is imposed,employment equals ________ workers.

When a rent ceiling below the equilibrium rent is put in place,the outcome is

-The above figure shows the market for buckets of golf balls at the driving range.A new leisure time tax is placed on suppliers in this market,shifting the supply curve from S0 to S1.The quantity of buckets without the tax is ________ and the quantity with the tax is ________.

The figure above shows the market for sugar beets.The government intervenes in this market and sets a support price at $35 a ton. -The figure above shows that the deadweight loss from the government's policy is

Who gains from a price support? Who loses? Explain how the size of the gain compares to the size of the loss.

-The table above gives the demand and supply schedules for the housing market in a small town.If a rent ceiling of $600 a month is imposed,what is the quantity demanded,the quantity supplied,and the shortage of housing?

A price floor is considered

In a housing market with a rent ceiling below the equilibrium rent,apartment seekers spend more time searching for an apartment than they would in a housing market without a rent ceiling.Why does this difference exist?

-The above figure shows the market for 2 bedroom town homes in San Diego.If a rent ceiling is set at $1,000 per month,what is the maximum rent someone is willing to pay in the black market?

If a rent ceiling is set below the equilibrium price,thus creating a ________,housing may be allocated by increasing search activity or creating a ________.

A price support leads to inefficiency because

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

The figure above shows the market for sugar beets.The government intervenes in this market and sets a support price at $35 a ton. -In the figure above,the quantity of sugar beets produced is million tons per year,and the quantity bought by consumers is million tons per year.

-The above figure shows a labor market.Before the minimum wage of $8 an hour is imposed,employment equals workers;after the minimum wage of $8 an hour is imposed,employment equals workers.

-The above figure shows the market for buckets of golf balls at the driving range.A new leisure time tax is placed on suppliers in this market,shifting the supply curve from S0 to S1.The quantity of buckets without the tax is and the quantity with the tax is .

If a rent ceiling is set below the equilibrium price,thus creating a ,housing may be allocated by increasing search activity or creating a .