Question 1

-The above figure shows a labor market with minimum wage equal to $16.In this figure,what area equals the resources lost because of job search?

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 2

-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 total tax revenue is equal to

Accepted Answer

A) $1,800. 
B) $600. 
C) $1,200. 
D) $900. 
E) $5,600. 
A) $1,800. 
B) $600. 
C) $1,200. 
D) $900. 
E) $5,600.

Question 3

Who loses and who gains from the minimum wage?

Accepted Answer

A) Losers are all workers and gainers are all firms. 
B) Losers are all firms and gainers are all workers. 
C) Losers are all firms and some workers,while gainers are other workers. 
D) Gainers are some firms and all workers,while losers are some firms. 
E) Gainers are some firms and some workers,while losers are other firms and other workers. 
A) Losers are all workers and gainers are all firms. 
B) Losers are all firms and gainers are all workers. 
C) Losers are all firms and some workers,while gainers are other workers. 
D) Gainers are some firms and all workers,while losers are some firms. 
E) Gainers are some firms and some workers,while losers are other firms and other workers.

Question 4

The shortage created by a price ceiling 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 5

Explain why low-skilled workers find that their employment opportunities are less with a minimum wage.

Accepted Answer

A minimum wage set above the equilibrium

Question 6

-The graph shows the labor market for teenagers in Atlanta.If the government sets a minimum wage of $6 an hour,the number of teenagers employed is ________.

Accepted Answer

A) 7,000 
B) 5,000 
C) 4,000 
D) 3,000 
E) less than 3,000 
A) 7,000 
B) 5,000 
C) 4,000 
D) 3,000 
E) less than 3,000

Question 7

In a crop market with a price support above the equilibrium price,the total amount of the subsidy paid to farmers is equal to the

Accepted Answer

A) quantity of the surplus crop multiplied by the support price. 
B) quantity of the crop produced multiplied by the support price. 
C) quantity of the crop purchased by domestic users multiplied by the support price. 
D) quantity of the surplus crop multiplied by the equilibrium price. 
E) quantity of the crop purchased by domestic users multiplied by the equilibrium price. 
A) quantity of the surplus crop multiplied by the support price. 
B) quantity of the crop produced multiplied by the support price. 
C) quantity of the crop purchased by domestic users multiplied by the support price. 
D) quantity of the surplus crop multiplied by the equilibrium price. 
E) quantity of the crop purchased by domestic users multiplied by the equilibrium price.

Question 8

-The above figure shows the market for gourmet ice cream.In effort to reduce obesity,government places a $2 tax per gallon on suppliers in this market,shifting the supply curve from S0 to S1.The tax incidence is

Accepted Answer

A) split equally between consumers and producers,each paying $1 per gallon. 
B) split equally between consumers and producers,each paying $2 per gallon. 
C) such that consumers pay $2 per gallon and producers pay $1 per gallon. 
D) such that consumers pay $1 per gallon and producers pay $2 per gallon. 
E) such that producers pay all of the tax. 
A) split equally between consumers and producers,each paying $1 per gallon. 
B) split equally between consumers and producers,each paying $2 per gallon. 
C) such that consumers pay $2 per gallon and producers pay $1 per gallon. 
D) such that consumers pay $1 per gallon and producers pay $2 per gallon. 
E) such that producers pay all of the tax.

Question 9

If buyers pay more of a tax than do the sellers,

Accepted Answer

A) demand is more elastic than supply. 
B) the amount of tax revenue collected by the government is almost zero. 
C) supply is more elastic than demand. 
D) the equilibrium price paid by buyers rises by less than half the amount of the tax. 
E) None of the above answers is correct. 
A) demand is more elastic than supply. 
B) the amount of tax revenue collected by the government is almost zero. 
C) supply is more elastic than demand. 
D) the equilibrium price paid by buyers rises by less than half the amount of the tax. 
E) None of the above answers is correct.

Question 10

-The graph shows the market for rental housing in Little Rock.The market for apartments is efficient when

Accepted Answer

A) the quantity of apartments demanded is 12,000 a month. 
B) the rent ceiling is set at $300 a month. 
C) there is no rent ceiling. 
D) the quantity of apartments supplied is 6,000 a month. 
E) the rent charged is less than $450. 
A) the quantity of apartments demanded is 12,000 a month. 
B) the rent ceiling is set at $300 a month. 
C) there is no rent ceiling. 
D) the quantity of apartments supplied is 6,000 a month. 
E) the rent charged is less than $450.

Question 11

-The table above gives the supply and demand schedules for scooters.Because of increased injuries sustained by children riding scooters,Citizens Against Scooter Accidents successfully lobbies the government to impose a price floor of $80.00 on scooters.
a.What is the quantity demanded and supplied after the price floor has been imposed?
b.Is there any shortage or surplus at this price floor? If so,how much?
c.If the price floor is raised to $110.00,what is the quantity demanded and supplied?
d.At a price floor of $110.00,is there any shortage or surplus? If so,how much?

Accepted Answer

a.The quantity demanded and supplied is

Question 12

In order to have an impact,a ________ must be set below the equilibrium price,and when this occurs,________.

Accepted Answer

A) price ceiling;consumer surplus increases 
B) price floor;consumer surplus decreases 
C) price ceiling;producer surplus decreases 
D) price support;total revenue increases 
E) price support;consumer surplus increases 
A) price ceiling;consumer surplus increases 
B) price floor;consumer surplus decreases 
C) price ceiling;producer surplus decreases 
D) price support;total revenue increases 
E) price support;consumer surplus increases

Question 13

Assume a market is producing efficiently.Which type of government intervention in this market might create a deadweight loss?
I.a price ceiling
Ii.a price floor
Iii.a price support

Accepted Answer

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

Question 14

-The above figure shows the domestic market for wheat.Suppose this market is isolated from global competition.The with no government intervention,the equilibrium price is ________ and the equilibrium quantity is ________.

Accepted Answer

A) $15 per ton;100 million tons 
B) $14 per ton;250 million tons 
C) $12 per ton;300 million tons 
D) $12 per ton;250 million tons 
E) $15 per ton;400 million tons 
A) $15 per ton;100 million tons 
B) $14 per ton;250 million tons 
C) $12 per ton;300 million tons 
D) $12 per ton;250 million tons 
E) $15 per ton;400 million tons

Question 15

Suppose the city of Chicago imposes a rent control program that fixes rents at $400 below the equilibrium rent.With this plan

Accepted Answer

A) the quantity of apartments demanded will increase. 
B) the quantity of apartments supplied will increase. 
C) young people and poor people will have an easier time finding apartments. 
D) the deadweight loss in Chicago's apartment market will be eliminated. 
E) there will be a surplus of apartments offered for rent. 
A) the quantity of apartments demanded will increase. 
B) the quantity of apartments supplied will increase. 
C) young people and poor people will have an easier time finding apartments. 
D) the deadweight loss in Chicago's apartment market will be eliminated. 
E) there will be a surplus of apartments offered for rent.

Question 16

Is the minimum wage fair?

Accepted Answer

A) Yes,because all workers benefit because they are paid more. 
B) No,because it enhances the prospects of voluntary exchange. 
C) No,because workers who lose their jobs are made worse off. 
D) Yes,because firms must pay a wage closer to a living wage. 
E) Yes,because workers need the extra income. 
A) Yes,because all workers benefit because they are paid more. 
B) No,because it enhances the prospects of voluntary exchange. 
C) No,because workers who lose their jobs are made worse off. 
D) Yes,because firms must pay a wage closer to a living wage. 
E) Yes,because workers need the extra income.

Question 17

If a rent ceiling is below the equilibrium rent,some allocation scheme must be used.The allocation methods include all of the following EXCEPT

Accepted Answer

A) charging the equilibrium rent. 
B) refusing to rent to individuals on the basis of sex,race,or some other attribute. 
C) requiring a payment,such as key money,in addition to the rent. 
D) the creation of a black market. 
E) increased search activity. 
A) charging the equilibrium rent. 
B) refusing to rent to individuals on the basis of sex,race,or some other attribute. 
C) requiring a payment,such as key money,in addition to the rent. 
D) the creation of a black market. 
E) increased search activity.

Question 18

We know that the minimum wage causes unemployment.So,why does the government impose one?

Accepted Answer

The main reason for the minimum wage is

Question 19

-The above figure shows a labor market with a minimum wage of $8 an hour.How many people are employed when the minimum wage is in place?

Accepted Answer

A) 40,000 
B) 60,000 
C) 80,000 
D) fewer than 40,000 
E) more than 80,000 
A) 40,000 
B) 60,000 
C) 80,000 
D) fewer than 40,000 
E) more than 80,000

Question 20

-The above figure shows the domestic market for wheat.Suppose this market is isolated from global competition and the government intervenes by setting a support price of $15 a ton.The quantity bought by domestic users once the price support is in place is

Accepted Answer

A) 300 million tons. 
B) 400 million tons. 
C) 250 million tons. 
D) 200 million tons. 
E) 100 million tons. 
A) 300 million tons. 
B) 400 million tons. 
C) 250 million tons. 
D) 200 million tons. 
E) 100 million tons.

-The above figure shows a labor market with minimum wage equal to $16.In this figure,what area equals the resources lost because of job search?

-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 total tax revenue is equal to

Who loses and who gains from the minimum wage?

The shortage created by a price ceiling will likely be

Explain why low-skilled workers find that their employment opportunities are less with a minimum wage.

-The graph shows the labor market for teenagers in Atlanta.If the government sets a minimum wage of $6 an hour,the number of teenagers employed is ________.

In a crop market with a price support above the equilibrium price,the total amount of the subsidy paid to farmers is equal to the

-The above figure shows the market for gourmet ice cream.In effort to reduce obesity,government places a $2 tax per gallon on suppliers in this market,shifting the supply curve from S0 to S1.The tax incidence is

If buyers pay more of a tax than do the sellers,

-The graph shows the market for rental housing in Little Rock.The market for apartments is efficient when

In order to have an impact,a must be set below the equilibrium price,and when this occurs,.

Assume a market is producing efficiently.Which type of government intervention in this market might create a deadweight loss? I.a price ceiling Ii.a price floor Iii.a price support

-The above figure shows the domestic market for wheat.Suppose this market is isolated from global competition.The with no government intervention,the equilibrium price is and the equilibrium quantity is .

Suppose the city of Chicago imposes a rent control program that fixes rents at $400 below the equilibrium rent.With this plan

Is the minimum wage fair?

If a rent ceiling is below the equilibrium rent,some allocation scheme must be used.The allocation methods include all of the following EXCEPT

We know that the minimum wage causes unemployment.So,why does the government impose one?

-The above figure shows a labor market with a minimum wage of $8 an hour.How many people are employed when the minimum wage is in place?

-The above figure shows the domestic market for wheat.Suppose this market is isolated from global competition and the government intervenes by setting a support price of $15 a ton.The quantity bought by domestic users once the price support is in place is

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 above figure shows a labor market with minimum wage equal to $16.In this figure,what area equals the resources lost because of job search?

-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 total tax revenue is equal to

Who loses and who gains from the minimum wage?

The shortage created by a price ceiling will likely be

Explain why low-skilled workers find that their employment opportunities are less with a minimum wage.

-The graph shows the labor market for teenagers in Atlanta.If the government sets a minimum wage of $6 an hour,the number of teenagers employed is ________.

In a crop market with a price support above the equilibrium price,the total amount of the subsidy paid to farmers is equal to the

-The above figure shows the market for gourmet ice cream.In effort to reduce obesity,government places a $2 tax per gallon on suppliers in this market,shifting the supply curve from S0 to S1.The tax incidence is

If buyers pay more of a tax than do the sellers,

-The graph shows the market for rental housing in Little Rock.The market for apartments is efficient when

In order to have an impact,a ________ must be set below the equilibrium price,and when this occurs,________.

Assume a market is producing efficiently.Which type of government intervention in this market might create a deadweight loss? I.a price ceiling Ii.a price floor Iii.a price support

-The above figure shows the domestic market for wheat.Suppose this market is isolated from global competition.The with no government intervention,the equilibrium price is ________ and the equilibrium quantity is ________.

Suppose the city of Chicago imposes a rent control program that fixes rents at $400 below the equilibrium rent.With this plan

Is the minimum wage fair?

If a rent ceiling is below the equilibrium rent,some allocation scheme must be used.The allocation methods include all of the following EXCEPT

We know that the minimum wage causes unemployment.So,why does the government impose one?

-The above figure shows a labor market with a minimum wage of $8 an hour.How many people are employed when the minimum wage is in place?

-The above figure shows the domestic market for wheat.Suppose this market is isolated from global competition and the government intervenes by setting a support price of $15 a ton.The quantity bought by domestic users once the price support is in place is

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

In order to have an impact,a must be set below the equilibrium price,and when this occurs,.

-The above figure shows the domestic market for wheat.Suppose this market is isolated from global competition.The with no government intervention,the equilibrium price is and the equilibrium quantity is .