Question 1

-In the figure above,if the wage rate is $6 per hour,then the

Accepted Answer

A)  firms' surplus is the area d + e + f. 
B)  workers' surplus is the area a + b + c. 
C)  deadweight loss equals zero. 
D)  Only answers A and C are correct. 
E)  Answers A, B, and C are correct. 
A)  firms' surplus is the area d + e + f. 
B)  workers' surplus is the area a + b + c. 
C)  deadweight loss equals zero. 
D)  Only answers A and C are correct. 
E)  Answers A, B, and C are correct.

Question 2

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 3

What are the effects of a rent ceiling set below the equilibrium rent?

Accepted Answer

A rent ceiling is the maximum legal rent

Question 4

Labor unions support the minimum wage because

Accepted Answer

A)  the increased unemployment is good for labor. 
B)  the value associated with the deadweight loss goes to labor unions. 
C)  labor unions prefer to operate in black markets. 
D)  it puts upward pressure on all wages. 
E)  union members are usually paid the minimum wage. 
A)  the increased unemployment is good for labor. 
B)  the value associated with the deadweight loss goes to labor unions. 
C)  labor unions prefer to operate in black markets. 
D)  it puts upward pressure on all wages. 
E)  union members are usually paid the minimum wage.

Question 5

When a price support is set above the equilibrium price,producers ________ the quantity supplied and consumers ________ the quantity demanded.

Accepted Answer

A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease 
E)  do not change; do not change 
A)  increase; increase 
B)  increase; decrease 
C)  decrease; increase 
D)  decrease; decrease 
E)  do not change; do not change

Question 6

-The labor demand and labor supply schedules are given in the table above.If a minimum wage of $11 per hour is imposed,

Accepted Answer

A)  a surplus of 300 workers occurs. 
B)  there is no shortage or surplus of workers. 
C)  900 workers are employed. 
D)  Both answers B and C are correct. 
E)  Both answers A and C are correct. 
A)  a surplus of 300 workers occurs. 
B)  there is no shortage or surplus of workers. 
C)  900 workers are employed. 
D)  Both answers B and C are correct. 
E)  Both answers A and C are correct.

Question 7

-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 produced once the price support is in place is

Accepted Answer

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

Question 8

-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 consumer surplus?

Accepted Answer

A)  area A + area B + area C 
B)  area A + area F 
C)  area C + area D + area E + area G 
D)  area A 
E)  area F 
A)  area A + area B + area C 
B)  area A + area F 
C)  area C + area D + area E + area G 
D)  area A 
E)  area F

Question 9

-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 true?

Accepted Answer

A)  The quantity of town homes demanded decreases to 100,000. 
B)  Black market rents might be as high as $1,300 per month. 
C)  The quantity of town homes supplied increases to 250,000. 
D)  More town homes are rented after the rent ceiling that before. 
E)  The quantity demanded of town homes is less than the quantity supplied. 
A)  The quantity of town homes demanded decreases to 100,000. 
B)  Black market rents might be as high as $1,300 per month. 
C)  The quantity of town homes supplied increases to 250,000. 
D)  More town homes are rented after the rent ceiling that before. 
E)  The quantity demanded of town homes is less than the quantity supplied.

Question 10

-The graph shows the market for holiday condos in West Palm Beach.If a rent ceiling is set at $1,700 a week,the quantity of holiday condos rented ________.

Accepted Answer

A)  is 2,000 a week 
B)  is 4,000 a week 
C)  is 5,000 a week 
D)  is some amount, but more information is needed to determine the amount. 
E)  depends on the black market 
A)  is 2,000 a week 
B)  is 4,000 a week 
C)  is 5,000 a week 
D)  is some amount, but more information is needed to determine the amount. 
E)  depends on the black market

Question 11

-The figure above shows the labor market in a region.If a minimum wage of $8 an hour is imposed,then the quantity of labor supplied is ________ and the quantity of labor demanded is ________.

Accepted Answer

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

Question 12

Which of the following is an example of a price floor?

Accepted Answer

A)  a law passed in a city to lower apartment rents by setting the maximum price that can be charged for rent 
B)  an equilibrium price 
C)  a minimum wage law 
D)  a law setting the highest price that can legally be charged for a gallon of gasoline. 
E)  None of the above answers give examples of a price floor. 
A)  a law passed in a city to lower apartment rents by setting the maximum price that can be charged for rent 
B)  an equilibrium price 
C)  a minimum wage law 
D)  a law setting the highest price that can legally be charged for a gallon of gasoline. 
E)  None of the above answers give examples of a price floor.

Question 13

Why would an increase in the minimum wage to $15 per hour lead to more unemployment for teenage and low-skilled workers?

Accepted Answer

Many teenage and low-skilled workers ear

Question 14

What is a price support program in an agricultural market? Explain its impact on a market.

Accepted Answer

A price support program is essentially a

Question 15

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

The figure above shows supply and demand in the market for labor. The government introduces a minimum wage of $7 per hour.
-In the figure above,the number of workers employed is ________,and the wage paid is ________.

Accepted Answer

A)  3,000; $7 per hour 
B)  7,000; $7 per hour 
C)  5,000; $5 per hour 
D)  5,000; $7 per hour 
E)  3,000; $5 per hour 
A)  3,000; $7 per hour 
B)  7,000; $7 per hour 
C)  5,000; $5 per hour 
D)  5,000; $7 per hour 
E)  3,000; $5 per hour

Question 17

The figure above shows the supply and demand curves in the market for rental housing. A rent ceiling is set at $400 per month.
-In the figure above,with the rent ceiling ________ units of housing are available,and black market rents might be as high as ________ a month.

Accepted Answer

A)  3,000; $625 
B)  6,000; $400 
C)  3,000; $550 
D)  4,000; $550 
E)  4,000; $625 
A)  3,000; $625 
B)  6,000; $400 
C)  3,000; $550 
D)  4,000; $550 
E)  4,000; $625

Question 18

In the market for cotton,suppose the equilibrium price is $10 per ton and the equilibrium quantity is 100 tons.If the government then imposes a price support of $20 per ton,

Accepted Answer

A)  marginal benefit exceeds marginal cost. 
B)  the market becomes more efficient 
C)  marginal cost decreases. 
D)  the government must supply some cotton to offset the shortage that results. 
E)  marginal cost exceeds marginal benefit. 
A)  marginal benefit exceeds marginal cost. 
B)  the market becomes more efficient 
C)  marginal cost decreases. 
D)  the government must supply some cotton to offset the shortage that results. 
E)  marginal cost exceeds marginal benefit.

Question 19

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 20

Black markets can occur when price ceilings are imposed in a market.Which of the following explains why sellers participate in a black market?

Accepted Answer

A)  Sellers are able to sell the product for a higher than legal price. 
B)  There are more buyers in the black market than in the legal market. 
C)  The demand is perfectly elastic in a black market. 
D)  The demand is perfectly inelastic in a black market. 
E)  The surplus in the legal market means that many sellers can sell their product in the black market. 
A)  Sellers are able to sell the product for a higher than legal price. 
B)  There are more buyers in the black market than in the legal market. 
C)  The demand is perfectly elastic in a black market. 
D)  The demand is perfectly inelastic in a black market. 
E)  The surplus in the legal market means that many sellers can sell their product in the black market.

-In the figure above,if the wage rate is $6 per hour,then the

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

What are the effects of a rent ceiling set below the equilibrium rent?

Labor unions support the minimum wage because

When a price support is set above the equilibrium price,producers the quantity supplied and consumers the quantity demanded.

-The labor demand and labor supply schedules are given in the table above.If a minimum wage of $11 per hour is imposed,

-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 produced once the price support is in place is

-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 consumer surplus?

-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 true?

-The graph shows the market for holiday condos in West Palm Beach.If a rent ceiling is set at $1,700 a week,the quantity of holiday condos rented ________.

-The figure above shows the labor market in a region.If a minimum wage of $8 an hour is imposed,then the quantity of labor supplied is and the quantity of labor demanded is .

Which of the following is an example of a price floor?

Why would an increase in the minimum wage to $15 per hour lead to more unemployment for teenage and low-skilled workers?

What is a price support program in an agricultural market? Explain its impact on a market.

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

The figure above shows supply and demand in the market for labor. The government introduces a minimum wage of $7 per hour. -In the figure above,the number of workers employed is ,and the wage paid is .

The figure above shows the supply and demand curves in the market for rental housing. A rent ceiling is set at $400 per month. -In the figure above,with the rent ceiling units of housing are available,and black market rents might be as high as a month.

In the market for cotton,suppose the equilibrium price is $10 per ton and the equilibrium quantity is 100 tons.If the government then imposes a price support of $20 per ton,

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

Black markets can occur when price ceilings are imposed in a market.Which of the following explains why sellers participate in 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

-In the figure above,if the wage rate is $6 per hour,then the

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

What are the effects of a rent ceiling set below the equilibrium rent?

Labor unions support the minimum wage because

When a price support is set above the equilibrium price,producers ________ the quantity supplied and consumers ________ the quantity demanded.

-The labor demand and labor supply schedules are given in the table above.If a minimum wage of $11 per hour is imposed,

-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 produced once the price support is in place is

-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 consumer surplus?

-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 true?

-The graph shows the market for holiday condos in West Palm Beach.If a rent ceiling is set at $1,700 a week,the quantity of holiday condos rented ________.

-The figure above shows the labor market in a region.If a minimum wage of $8 an hour is imposed,then the quantity of labor supplied is ________ and the quantity of labor demanded is ________.

Which of the following is an example of a price floor?

Why would an increase in the minimum wage to $15 per hour lead to more unemployment for teenage and low-skilled workers?

What is a price support program in an agricultural market? Explain its impact on a market.

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

The figure above shows supply and demand in the market for labor. The government introduces a minimum wage of $7 per hour. -In the figure above,the number of workers employed is ________,and the wage paid is ________.

The figure above shows the supply and demand curves in the market for rental housing. A rent ceiling is set at $400 per month. -In the figure above,with the rent ceiling ________ units of housing are available,and black market rents might be as high as ________ a month.

In the market for cotton,suppose the equilibrium price is $10 per ton and the equilibrium quantity is 100 tons.If the government then imposes a price support of $20 per ton,

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

Black markets can occur when price ceilings are imposed in a market.Which of the following explains why sellers participate in 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

When a price support is set above the equilibrium price,producers the quantity supplied and consumers the quantity demanded.

-The figure above shows the labor market in a region.If a minimum wage of $8 an hour is imposed,then the quantity of labor supplied is and the quantity of labor demanded is .

The figure above shows supply and demand in the market for labor. The government introduces a minimum wage of $7 per hour. -In the figure above,the number of workers employed is ,and the wage paid is .

The figure above shows the supply and demand curves in the market for rental housing. A rent ceiling is set at $400 per month. -In the figure above,with the rent ceiling units of housing are available,and black market rents might be as high as a month.