Question 1

The deadweight loss from a tax

Accepted Answer

A) is the tax revenue the government collects when people die. 
B) is the split of a tax between the amount paid and the amount collected. 
C) equals the amount collected as revenue from the tax. 
D) is called the excess burden of the tax. 
E) equals the amount collected as revenue from the tax plus the excess burden of the tax. 
A) is the tax revenue the government collects when people die. 
B) is the split of a tax between the amount paid and the amount collected. 
C) equals the amount collected as revenue from the tax. 
D) is called the excess burden of the tax. 
E) equals the amount collected as revenue from the tax plus the excess burden of the tax.

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,the firms' surplus equals ________.

Accepted Answer

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

Question 3

Which of the following is true?
I.A price support is inefficient.
Ii.A price floor set above the equilibrium price creates a surplus.
Iii.A price ceiling set above the equilibrium price creates a black market.

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 4

The inefficiency of a sales tax on a good is ultimately the result of the

Accepted Answer

A) low tax revenue earned by the government relative to the cost of collection. 
B) wedge between what buyers pay for the good and what sellers receive for the good. 
C) buyers being unable to avoid paying the tax. 
D) sellers being unable to avoid paying the tax. 
E) increase in the consumer surplus that is more than offset by the decrease in the producer surplus. 
A) low tax revenue earned by the government relative to the cost of collection. 
B) wedge between what buyers pay for the good and what sellers receive for the good. 
C) buyers being unable to avoid paying the tax. 
D) sellers being unable to avoid paying the tax. 
E) increase in the consumer surplus that is more than offset by the decrease in the producer surplus.

Question 5

An illegal market in which the price exceeds a legally imposed price ceiling is called a

Accepted Answer

A) shortage market. 
B) surplus market. 
C) black market. 
D) fair market. 
E) subsidized market. 
A) shortage market. 
B) surplus market. 
C) black market. 
D) fair market. 
E) subsidized market.

Question 6

The demand curve for pizza is downward sloping and the supply curve is upward sloping.If the government imposes a $2 tax on a pizza,________ the tax.

Accepted Answer

A) only consumers pay 
B) only producers pay 
C) both producers and consumers pay part of 
D) neither producers nor consumers pay part of 
E) the government pays 
A) only consumers pay 
B) only producers pay 
C) both producers and consumers pay part of 
D) neither producers nor consumers pay part of 
E) the government pays

Question 7

If the minimum wage is set above the equilibrium wage,after taking into account the resources lost in job search,the firms' surplus ________ and the workers' surplus ________.

Accepted Answer

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

Question 8

When a minimum wage is ________,the firms' surplus and workers' surplus shrink,a deadweight loss ________,and resources are lost in job search.

Accepted Answer

A) inefficient;arises 
B) inefficient;disappears 
C) efficient;arises 
D) efficient;disappears 
E) nonexistent;arises 
A) inefficient;arises 
B) inefficient;disappears 
C) efficient;arises 
D) efficient;disappears 
E) nonexistent;arises

Question 9

-The figure above shows the labor market in a region.For a minimum wage to change the wage rate and amount of employment,it must be

Accepted Answer

A) left to the forces of supply and demand. 
B) set above $6 an hour. 
C) set equal to $6 an hour. 
D) set below $6 an hour. 
E) set at $12 per hour. 
A) left to the forces of supply and demand. 
B) set above $6 an hour. 
C) set equal to $6 an hour. 
D) set below $6 an hour. 
E) set at $12 per hour.

Question 10

When a rent ceiling is ________,consumer surplus and producer surplus shrink,a deadweight loss ________,and resources are lost in search activity and evading the rent ceiling law.

Accepted Answer

A) inefficient;arises 
B) inefficient;disappears 
C) efficient;arises 
D) efficient;disappears 
E) nonexistent;arises 
A) inefficient;arises 
B) inefficient;disappears 
C) efficient;arises 
D) efficient;disappears 
E) nonexistent;arises

Question 11

-At harvest time the supply of wheat is perfectly inelastic.If the government taxes wheat at $1 a bushel,then

Accepted Answer

A) the seller pays the entire tax. 
B) the buyer pays the entire tax. 
C) the seller and the buyer split the tax evenly. 
D) the seller and the buyer split the tax but the seller pays more. 
E) no one pays the tax because the wheat must be harvested or it will go to waste. 
A) the seller pays the entire tax. 
B) the buyer pays the entire tax. 
C) the seller and the buyer split the tax evenly. 
D) the seller and the buyer split the tax but the seller pays more. 
E) no one pays the tax because the wheat must be harvested or it will go to waste.

Question 12

Suppose the current equilibrium wage rate for lifeguards in Houston is $7.85 an hour.A minimum wage law that creates a price floor of $8.50 an hour leads to

Accepted Answer

A) a surplus of lifeguards in Houston. 
B) a shortage of lifeguards in Houston. 
C) no changes in the lifeguard market. 
D) a change in the quantity of lifeguards supplied but no change in the quantity of lifeguards demanded. 
E) an increase in the number of lifeguards employed. 
A) a surplus of lifeguards in Houston. 
B) a shortage of lifeguards in Houston. 
C) no changes in the lifeguard market. 
D) a change in the quantity of lifeguards supplied but no change in the quantity of lifeguards demanded. 
E) an increase in the number of lifeguards employed.

Question 13

The people who immediately benefit from a minimum wage are

Accepted Answer

A) employers who now pay the minimum wage. 
B) those people who enter the labor force to search for minimum wage jobs. 
C) the workers who retain their jobs after enactment of the minimum wage. 
D) everyone,both demanders and suppliers,because the minimum wage benefits everyone. 
E) all workers. 
A) employers who now pay the minimum wage. 
B) those people who enter the labor force to search for minimum wage jobs. 
C) the workers who retain their jobs after enactment of the minimum wage. 
D) everyone,both demanders and suppliers,because the minimum wage benefits everyone. 
E) all workers.

Question 14

-The above figure shows a labor market with minimum wage equal to $16.In this figure,what area equals the deadweight loss?

Accepted Answer

A) area A 
B) area B 
C) area C 
D) area D 
E) area E 
A) area A 
B) area B 
C) area C 
D) area D 
E) area E

Question 15

The deadweight loss from a rent ceiling below the equilibrium rent is smallest when the supply of housing is

Accepted Answer

A) perfectly elastic. 
B) elastic but not perfectly elastic. 
C) unit elastic. 
D) inelastic but not perfectly inelastic. 
E) perfectly inelastic. 
A) perfectly elastic. 
B) elastic but not perfectly elastic. 
C) unit elastic. 
D) inelastic but not perfectly inelastic. 
E) perfectly inelastic.

Question 16

New York City,which has had a rent ceiling law for more than sixty years,has many abandoned apartment buildings throughout the city.Which of the following explains this?

Accepted Answer

A) Few workers with jobs in the city want to live in there because of pollution. 
B) No building permits for new apartment buildings have been issued for over fifty years. 
C) Once any building gets so old,it is abandoned. 
D) Landlords have no incentive to finance maintenance and remodeling of apartment buildings. 
E) Rent ceilings make the construction of new buildings so profitable that old buildings are simply abandoned. 
A) Few workers with jobs in the city want to live in there because of pollution. 
B) No building permits for new apartment buildings have been issued for over fifty years. 
C) Once any building gets so old,it is abandoned. 
D) Landlords have no incentive to finance maintenance and remodeling of apartment buildings. 
E) Rent ceilings make the construction of new buildings so profitable that old buildings are simply abandoned.

Question 17

Suppose the supply of apartments in Minneapolis is perfectly elastic.The effect of a $100 per month tax on all apartments is that

Accepted Answer

A) landlords pay none of the tax and there is a surplus of apartments. 
B) landlords pay all of the tax and suffer all of the deadweight loss. 
C) landlords pay all of the tax and no changes take place in the quantity of apartments supplied. 
D) renters pay all of the tax. 
E) the government collects no tax revenue because the supply is perfectly elastic. 
A) landlords pay none of the tax and there is a surplus of apartments. 
B) landlords pay all of the tax and suffer all of the deadweight loss. 
C) landlords pay all of the tax and no changes take place in the quantity of apartments supplied. 
D) renters pay all of the tax. 
E) the government collects no tax revenue because the supply is perfectly elastic.

Question 18

A minimum wage law

Accepted Answer

A) lowers the wage rate of workers who are able to get a job. 
B) increases employment. 
C) increases the time spent searching by workers who cannot find a job. 
D) creates efficiency in the labor market. 
E) must be set below the equilibrium wage rate in order to have an impact. 
A) lowers the wage rate of workers who are able to get a job. 
B) increases employment. 
C) increases the time spent searching by workers who cannot find a job. 
D) creates efficiency in the labor market. 
E) must be set below the equilibrium wage rate in order to have an impact.

Question 19

Rent ceilings set below the equilibrium rent
I.create a deadweight loss.
Ii.increase search activity.
Iii.result in a surplus of apartments.

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 20

If neither the demand nor supply of a good is perfectly elastic or inelastic,a tax on the good ________ consumer surplus and ________ producer surplus.

Accepted Answer

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

The deadweight loss from a tax

-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,the firms' surplus equals ________.

Which of the following is true? I.A price support is inefficient. Ii.A price floor set above the equilibrium price creates a surplus. Iii.A price ceiling set above the equilibrium price creates a black market.

The inefficiency of a sales tax on a good is ultimately the result of the

An illegal market in which the price exceeds a legally imposed price ceiling is called a

The demand curve for pizza is downward sloping and the supply curve is upward sloping.If the government imposes a $2 tax on a pizza,________ the tax.

If the minimum wage is set above the equilibrium wage,after taking into account the resources lost in job search,the firms' surplus and the workers' surplus .

When a minimum wage is ,the firms' surplus and workers' surplus shrink,a deadweight loss ,and resources are lost in job search.

-The figure above shows the labor market in a region.For a minimum wage to change the wage rate and amount of employment,it must be

When a rent ceiling is ,consumer surplus and producer surplus shrink,a deadweight loss ,and resources are lost in search activity and evading the rent ceiling law.

-At harvest time the supply of wheat is perfectly inelastic.If the government taxes wheat at $1 a bushel,then

Suppose the current equilibrium wage rate for lifeguards in Houston is $7.85 an hour.A minimum wage law that creates a price floor of $8.50 an hour leads to

The people who immediately benefit from a minimum wage are

-The above figure shows a labor market with minimum wage equal to $16.In this figure,what area equals the deadweight loss?

The deadweight loss from a rent ceiling below the equilibrium rent is smallest when the supply of housing is

New York City,which has had a rent ceiling law for more than sixty years,has many abandoned apartment buildings throughout the city.Which of the following explains this?

Suppose the supply of apartments in Minneapolis is perfectly elastic.The effect of a $100 per month tax on all apartments is that

A minimum wage law

Rent ceilings set below the equilibrium rent I.create a deadweight loss. Ii.increase search activity. Iii.result in a surplus of apartments.

If neither the demand nor supply of a good is perfectly elastic or inelastic,a tax on the good consumer surplus and producer surplus.

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

The deadweight loss from a tax

-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,the firms' surplus equals ________.

Which of the following is true? I.A price support is inefficient. Ii.A price floor set above the equilibrium price creates a surplus. Iii.A price ceiling set above the equilibrium price creates a black market.

The inefficiency of a sales tax on a good is ultimately the result of the

An illegal market in which the price exceeds a legally imposed price ceiling is called a

The demand curve for pizza is downward sloping and the supply curve is upward sloping.If the government imposes a $2 tax on a pizza,________ the tax.

If the minimum wage is set above the equilibrium wage,after taking into account the resources lost in job search,the firms' surplus ________ and the workers' surplus ________.

When a minimum wage is ________,the firms' surplus and workers' surplus shrink,a deadweight loss ________,and resources are lost in job search.

-The figure above shows the labor market in a region.For a minimum wage to change the wage rate and amount of employment,it must be

When a rent ceiling is ________,consumer surplus and producer surplus shrink,a deadweight loss ________,and resources are lost in search activity and evading the rent ceiling law.

-At harvest time the supply of wheat is perfectly inelastic.If the government taxes wheat at $1 a bushel,then

Suppose the current equilibrium wage rate for lifeguards in Houston is $7.85 an hour.A minimum wage law that creates a price floor of $8.50 an hour leads to

The people who immediately benefit from a minimum wage are

-The above figure shows a labor market with minimum wage equal to $16.In this figure,what area equals the deadweight loss?

The deadweight loss from a rent ceiling below the equilibrium rent is smallest when the supply of housing is

New York City,which has had a rent ceiling law for more than sixty years,has many abandoned apartment buildings throughout the city.Which of the following explains this?

Suppose the supply of apartments in Minneapolis is perfectly elastic.The effect of a $100 per month tax on all apartments is that

A minimum wage law

Rent ceilings set below the equilibrium rent I.create a deadweight loss. Ii.increase search activity. Iii.result in a surplus of apartments.

If neither the demand nor supply of a good is perfectly elastic or inelastic,a tax on the good ________ consumer surplus and ________ producer surplus.

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 set above the equilibrium wage,after taking into account the resources lost in job search,the firms' surplus and the workers' surplus .

When a minimum wage is ,the firms' surplus and workers' surplus shrink,a deadweight loss ,and resources are lost in job search.

When a rent ceiling is ,consumer surplus and producer surplus shrink,a deadweight loss ,and resources are lost in search activity and evading the rent ceiling law.

If neither the demand nor supply of a good is perfectly elastic or inelastic,a tax on the good consumer surplus and producer surplus.