Question 1

-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 2

A price floor

Accepted Answer

A)  changes the equilibrium price if it is imposed in black markets. 
B)  changes the price and quantity if it is set below the equilibrium price. 
C)  changes the price and quantity if it is set above the equilibrium price. 
D)  does not create a black market if it is set above the equilibrium price. 
E)  changes the price and quantity only if it equals the equilibrium price. 
A)  changes the equilibrium price if it is imposed in black markets. 
B)  changes the price and quantity if it is set below the equilibrium price. 
C)  changes the price and quantity if it is set above the equilibrium price. 
D)  does not create a black market if it is set above the equilibrium price. 
E)  changes the price and quantity only if it equals the equilibrium price.

Question 3

-The above figure shows a housing market with a rent ceiling equal to $1,000.In this figure,after taking account of the resources lost in search,what area is equal to the consumer surplus?

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 4

A minimum wage set above the equilibrium wage rate

Accepted Answer

A)  increases the quantity of labor services supplied. 
B)  decreases the quantity of labor services supplied. 
C)  has no effect on the quantity of labor services supplied. 
D)  shifts the labor supply curve rightward. 
E)  shifts the labor supply curve leftward. 
A)  increases the quantity of labor services supplied. 
B)  decreases the quantity of labor services supplied. 
C)  has no effect on the quantity of labor services supplied. 
D)  shifts the labor supply curve rightward. 
E)  shifts the labor supply curve leftward.

Question 5

A rent ceiling controls the rent portion of the cost of housing but not the search cost.So when the search cost is ________ the rent,some people end up paying a ________ opportunity cost for housing than they would if there were no rent ceiling.

Accepted Answer

A)  added to; lower 
B)  subtracted from; higher 
C)  subtracted from; lower 
D)  added to; higher 
E)  equal to; lower 
A)  added to; lower 
B)  subtracted from; higher 
C)  subtracted from; lower 
D)  added to; higher 
E)  equal to; lower

Question 6

Suppose the equilibrium rent in Denver is $1,050.A rent ceiling of $755 per month leads to

Accepted Answer

A)  a surplus of apartments in Denver. 
B)  a shortage of apartments in Denver. 
C)  no change in the Denver apartment market. 
D)  fair prices in the Denver 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 Denver. 
B)  a shortage of apartments in Denver. 
C)  no change in the Denver apartment market. 
D)  fair prices in the Denver 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 7

Suppose the equilibrium price of a gallon of milk is $4.If the government imposes a price floor of $5 per gallon of milk,the

Accepted Answer

A)  quantity supplied of milk falls short of the quantity demanded. 
B)  quantity supplied of milk exceeds the quantity demanded. 
C)  supply increases. 
D)  demand decreases. 
E)  price of milk remains $4 per gallon. 
A)  quantity supplied of milk falls short of the quantity demanded. 
B)  quantity supplied of milk exceeds the quantity demanded. 
C)  supply increases. 
D)  demand decreases. 
E)  price of milk remains $4 per gallon.

Question 8

Price supports are generally used in

Accepted Answer

A)  labor markets. 
B)  industrial markets. 
C)  housing markets. 
D)  markets for services. 
E)  agricultural markets. 
A)  labor markets. 
B)  industrial markets. 
C)  housing markets. 
D)  markets for services. 
E)  agricultural markets.

Question 9

Suppose that producers are richer than consumers.Is a price support program fair? Explain your answer.

Accepted Answer

A price support program is unfair.It is

Question 10

When a price ceiling is set below the equilibrium price,the quantity supplied ________ the quantity demanded and ________ exists.

Accepted Answer

A)  is less than; a surplus 
B)  is less than; a shortage 
C)  is greater than; a surplus 
D)  is greater than; a shortage 
E)  equals; an equilibrium 
A)  is less than; a surplus 
B)  is less than; a shortage 
C)  is greater than; a surplus 
D)  is greater than; a shortage 
E)  equals; an equilibrium

Question 11

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 12

-The figure above shows the labor market in a region.In which of the following cases would the amount of unemployment be the largest?

Accepted Answer

A)  when the market is at its equilibrium, with no minimum wage 
B)  when a minimum wage of $4 an hour is imposed 
C)  when a minimum wage of $6 an hour is imposed 
D)  when a minimum wage of $8 an hour is imposed 
E)  None of the above because the market will adjust so that there is no unemployment. 
A)  when the market is at its equilibrium, with no minimum wage 
B)  when a minimum wage of $4 an hour is imposed 
C)  when a minimum wage of $6 an hour is imposed 
D)  when a minimum wage of $8 an hour is imposed 
E)  None of the above because the market will adjust so that there is no unemployment.

Question 13

-The demand and supply schedules for pizza are in the table above.A price ceiling of $4 per slice results in

Accepted Answer

A)  a surplus of 20 slices of pizza. 
B)  a shortage of 20 slices of pizza. 
C)  a shortage of 40 slices of pizza. 
D)  a shortage of 60 slices of pizza. 
E)  neither a shortage nor a surplus. 
A)  a surplus of 20 slices of pizza. 
B)  a shortage of 20 slices of pizza. 
C)  a shortage of 40 slices of pizza. 
D)  a shortage of 60 slices of pizza. 
E)  neither a shortage nor a surplus.

Question 14

-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 15

Rent ceilings

Accepted Answer

A)  increase search activity. 
B)  result in surpluses. 
C)  create efficiency. 
D)  benefit producers. 
E)  have no effect if they are set below the equilibrium rent. 
A)  increase search activity. 
B)  result in surpluses. 
C)  create efficiency. 
D)  benefit producers. 
E)  have no effect if they are set below the equilibrium rent.

Question 16

Why do some workers lose their job when the minimum wage is increased?

Accepted Answer

A)  The increase in labor costs decreases the supply of the product, thereby raising the price of the good so that the equilibrium quantity decreases to zero. 
B)  The increase in the minimum wage decreases the quantity of labor demanded. 
C)  The demand for labor is perfectly inelastic. 
D)  The supply of labor decreases. 
E)  The demand for labor is perfectly elastic. 
A)  The increase in labor costs decreases the supply of the product, thereby raising the price of the good so that the equilibrium quantity decreases to zero. 
B)  The increase in the minimum wage decreases the quantity of labor demanded. 
C)  The demand for labor is perfectly inelastic. 
D)  The supply of labor decreases. 
E)  The demand for labor is perfectly elastic.

Question 17

-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.As a result of this price support,the total subsidy paid to wheat farmers equals

Accepted Answer

A)  $4 billion. 
B)  $3 billion. 
C)  $3.5 billion. 
D)  $1.5 billion. 
E)  $4.5 billion 
A)  $4 billion. 
B)  $3 billion. 
C)  $3.5 billion. 
D)  $1.5 billion. 
E)  $4.5 billion

Question 18

-The above figure shows a housing market with a rent ceiling equal to $1,000.In this figure,what area is equal to the producer surplus?

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 19

A minimum wage

Accepted Answer

A)  increases all workers' surplus because the wage rate increases. 
B)  increases consumer surplus because the price of the good decreases. 
C)  decreases the firms' surplus because fewer workers are hired at the higher wage. 
D)  increases the firms' surplus and the workers' surplus because it increases the efficiency of the labor market. 
E)  None of the above answers is correct. 
A)  increases all workers' surplus because the wage rate increases. 
B)  increases consumer surplus because the price of the good decreases. 
C)  decreases the firms' surplus because fewer workers are hired at the higher wage. 
D)  increases the firms' surplus and the workers' surplus because it increases the efficiency of the labor market. 
E)  None of the above answers is correct.

Question 20

A black market

Accepted Answer

A)  is legal only when it is associated with government price ceilings. 
B)  is defined as the deadweight loss associated with taxes. 
C)  benefits no one. 
D)  is a potential outcome of a price ceiling. 
E)  is always legal. 
A)  is legal only when it is associated with government price ceilings. 
B)  is defined as the deadweight loss associated with taxes. 
C)  benefits no one. 
D)  is a potential outcome of a price ceiling. 
E)  is always legal.

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

A price floor

-The above figure shows a housing market with a rent ceiling equal to $1,000.In this figure,after taking account of the resources lost in search,what area is equal to the consumer surplus?

A minimum wage set above the equilibrium wage rate

A rent ceiling controls the rent portion of the cost of housing but not the search cost.So when the search cost is the rent,some people end up paying a opportunity cost for housing than they would if there were no rent ceiling.

Suppose the equilibrium rent in Denver is $1,050.A rent ceiling of $755 per month leads to

Suppose the equilibrium price of a gallon of milk is $4.If the government imposes a price floor of $5 per gallon of milk,the

Price supports are generally used in

Suppose that producers are richer than consumers.Is a price support program fair? Explain your answer.

When a price ceiling is set below the equilibrium price,the quantity supplied the quantity demanded and exists.

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

-The figure above shows the labor market in a region.In which of the following cases would the amount of unemployment be the largest?

-The demand and supply schedules for pizza are in the table above.A price ceiling of $4 per slice results in

-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 ________.

Rent ceilings

Why do some workers lose their job when the minimum wage is increased?

-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.As a result of this price support,the total subsidy paid to wheat farmers equals

-The above figure shows a housing market with a rent ceiling equal to $1,000.In this figure,what area is equal to the producer surplus?

A minimum wage

A black market

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

Exam 7: Government Actions in Markets

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

A price floor

-The above figure shows a housing market with a rent ceiling equal to $1,000.In this figure,after taking account of the resources lost in search,what area is equal to the consumer surplus?

A minimum wage set above the equilibrium wage rate

A rent ceiling controls the rent portion of the cost of housing but not the search cost.So when the search cost is ________ the rent,some people end up paying a ________ opportunity cost for housing than they would if there were no rent ceiling.

Suppose the equilibrium rent in Denver is $1,050.A rent ceiling of $755 per month leads to

Suppose the equilibrium price of a gallon of milk is $4.If the government imposes a price floor of $5 per gallon of milk,the

Price supports are generally used in

Suppose that producers are richer than consumers.Is a price support program fair? Explain your answer.

When a price ceiling is set below the equilibrium price,the quantity supplied ________ the quantity demanded and ________ exists.

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

-The figure above shows the labor market in a region.In which of the following cases would the amount of unemployment be the largest?

-The demand and supply schedules for pizza are in the table above.A price ceiling of $4 per slice results in

-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 ________.

Rent ceilings

Why do some workers lose their job when the minimum wage is increased?

-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.As a result of this price support,the total subsidy paid to wheat farmers equals

-The above figure shows a housing market with a rent ceiling equal to $1,000.In this figure,what area is equal to the producer surplus?

A minimum wage

A black market

Getting Started

The U.S.and Global Economies

The Economic Problem

Demand and Supply

Elasticities of Demand and Supply

Efficiency and Fairness of Markets

Taxes

Global Markets in Action

Externalities

Public Goods and Common Resources

Markets with Private Information

Consumer Choice and Demand

Production and Cost

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Markets for Factors of Production

Economic Inequality

Filters

A rent ceiling controls the rent portion of the cost of housing but not the search cost.So when the search cost is the rent,some people end up paying a opportunity cost for housing than they would if there were no rent ceiling.

When a price ceiling is set below the equilibrium price,the quantity supplied the quantity demanded and exists.

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