Exam 7: Government Actions in Markets

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.

-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 ________.

-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.

To have an effective price support program,the government must i.isolate the domestic market from the world market. ii.pay the farmers a subsidy. iii.introduce a price floor.

Suppose the equilibrium price of cotton is $100 per ton.A price support set at ________ than $100 per ton ________.

A price support directly sets the

Which of the following is true? i.A price ceiling set below the equilibrium price decreases search activity. ii.A minimum wage is an example of a price ceiling. iii.A price support decreases the quantity consumed.

-The above figure shows the market for winter jackets.In an effort to keep the nation warm,the president places a price ceiling of $100 in the market for winter jackets.What would be the maximum price someone would pay in the black market?

In the labor market,as wages rise,households

Labor unions ________ increases in the minimum wage because an increase in the minimum wage ________ the demand for union labor.

An effective price support ________ producers and ________ a deadweight loss.

Which of the following decrease the deadweight loss from a rent ceiling set below the equilibrium rent? i.lowering the ceiling ii.dedicating more resources to enforcement of the ceiling iii.raising the ceiling

Why do rent ceilings lead to shortages and black markets?

-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?

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 government subsidy accounts for ________ percent of the farmers' revenue.

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 government provides a subsidy to the farmers of ________ million.

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

Suppose the current equilibrium wage rate for housekeepers is $8.60 per hour.An increase in the minimum wage to $7.50 per hour 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,the deadweight loss equals ________.

A price floor