Question 1

If a rent ceiling is set ________ the equilibrium price,the effect can result in a housing ________.

Accepted Answer

A)  below; surplus 
B)  below; shortage 
C)  above; shortage 
D)  above; surplus 
E)  equal to; surplus 
A)  below; surplus 
B)  below; shortage 
C)  above; shortage 
D)  above; surplus 
E)  equal to; surplus

Question 2

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 to make the price support work,the government buys ________ million tons of sugar beets.

Accepted Answer

A)  10 
B)  20 
C)  30 
D)  5 
E)  15 
A)  10 
B)  20 
C)  30 
D)  5 
E)  15

Question 3

A rent ceiling creates a deadweight loss

Accepted Answer

A)  if it is set below the equilibrium rent. 
B)  if it is set equal to the equilibrium rent. 
C)  if it set above the equilibrium rent. 
D)  if it decreases the taxes the government collects in the housing market. 
E)  never, because if it did create a deadweight loss, the government would not impose it. 
A)  if it is set below the equilibrium rent. 
B)  if it is set equal to the equilibrium rent. 
C)  if it set above the equilibrium rent. 
D)  if it decreases the taxes the government collects in the housing market. 
E)  never, because if it did create a deadweight loss, the government would not impose it.

Question 4

The surplus created by a price floor 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

-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.

Question 6

-The above figure shows a labor market.Before the minimum wage of $8 an hour is imposed,employment equals ________ workers; after the minimum wage of $8 an hour is imposed,employment equals ________ workers.

Accepted Answer

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

Question 7

A price floor in an agricultural market is called

Accepted Answer

A)  an agricultural floor. 
B)  a farm support. 
C)  a price support. 
D)  a farm subsidy. 
E)  a farm support price. 
A)  an agricultural floor. 
B)  a farm support. 
C)  a price support. 
D)  a farm subsidy. 
E)  a farm support price.

Question 8

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 9

When a minimum wage is introduced ________ the equilibrium wage rate,the quantity of labor demanded ________ and the quantity of labor supplied ________,thus creating unemployment.

Accepted Answer

A)  above; increases; decreases 
B)  below; increases; decreases 
C)  above; decreases; increases 
D)  above; decreases; decreases 
E)  below; decreases; decreases 
A)  above; increases; decreases 
B)  below; increases; decreases 
C)  above; decreases; increases 
D)  above; decreases; decreases 
E)  below; decreases; decreases

Question 10

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 11

A price ceiling in the market for gasoline that is below the equilibrium price will lead to

Accepted Answer

A)  the quantity demanded of gasoline exceeding the quantity supplied. 
B)  an increase in the demand for gasoline. 
C)  a decrease in the supply of gasoline. 
D)  the quantity supplied of gasoline exceeding the quantity demanded. 
E)  no change in the market since the price ceiling is below the equilibrium price. 
A)  the quantity demanded of gasoline exceeding the quantity supplied. 
B)  an increase in the demand for gasoline. 
C)  a decrease in the supply of gasoline. 
D)  the quantity supplied of gasoline exceeding the quantity demanded. 
E)  no change in the market since the price ceiling is below the equilibrium price.

Question 12

The opportunity cost of an apartment in a rent controlled market is equal to

Accepted Answer

A)  the rent charged for the apartment. 
B)  the opportunity cost of searching for the apartment. 
C)  the rent charged for the apartment plus the opportunity cost of searching for the apartment. 
D)  nothing because of the surplus of apartments when there are rent controls. 
E)  the rent charged for the apartment minus the opportunity cost of searching for the apartment. 
A)  the rent charged for the apartment. 
B)  the opportunity cost of searching for the apartment. 
C)  the rent charged for the apartment plus the opportunity cost of searching for the apartment. 
D)  nothing because of the surplus of apartments when there are rent controls. 
E)  the rent charged for the apartment minus the opportunity cost of searching for the apartment.

Question 13

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 14

-The graph shows the labor market for teenagers in Atlanta.If the government sets a minimum wage of $6 an hour,then the maximum amount that a teenager would be willing to spend on job search is ________ an hour.

Accepted Answer

A)  $2 
B)  $4 
C)  $5 
D)  $6 
E)  $3 
A)  $2 
B)  $4 
C)  $5 
D)  $6 
E)  $3

Question 15

-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.As a result,there is a

Accepted Answer

A)  shortage equal to 150,000 jackets. 
B)  surplus equal to 150,000 jackets. 
C)  surplus equal to 300,000 jackets. 
D)  shortage equal to 250,000 jackets. 
E)  shortage equal to 100,000 jackets. 
A)  shortage equal to 150,000 jackets. 
B)  surplus equal to 150,000 jackets. 
C)  surplus equal to 300,000 jackets. 
D)  shortage equal to 250,000 jackets. 
E)  shortage equal to 100,000 jackets.

Question 16

If a rent ceiling is imposed that is less than the equilibrium rent,which of the following outcomes is most likely to occur?

Accepted Answer

A)  reduced search activity 
B)  black market activity 
C)  a building boom 
D)  a housing surplus 
E)  None of the above answers is correct because to have an impact, the rent ceiling must be above the equilibrium rent. 
A)  reduced search activity 
B)  black market activity 
C)  a building boom 
D)  a housing surplus 
E)  None of the above answers is correct because to have an impact, the rent ceiling must be above the equilibrium rent.

Question 17

A price support set above the equilibrium price does which of the following?
i.decreases producer surplus
ii.decreases consumer surplus
iii.decreases the marginal cost of the last unit produced

Accepted Answer

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

Question 18

-The above figure shows the market for DVDs.The government decides that all citizens deserve to watch affordable DVDs so a price ceiling of $12 per DVD is placed on DVDs.After this price ceiling is in effect,producer surplus equals ________.

Accepted Answer

A)  $900,000 
B)  $400,000 
C)  $200,000 
D)  $100,000 
E)  $1,800,000 
A)  $900,000 
B)  $400,000 
C)  $200,000 
D)  $100,000 
E)  $1,800,000

Question 19

Following a major natural disaster that destroys housing,a rent ceiling ________ be an effective policy to increase the quantity of more affordable housing for displaced residents because it would ________.

Accepted Answer

A)  would not; discourage rebuilding and result in a shortage 
B)  would not; cause the quantity supplied to exceed the quantity demanded 
C)  would; cause increased search activity 
D)  would; create a black market that would result in a lower rent 
E)  would; encourage a greater quantity supplied 
A)  would not; discourage rebuilding and result in a shortage 
B)  would not; cause the quantity supplied to exceed the quantity demanded 
C)  would; cause increased search activity 
D)  would; create a black market that would result in a lower rent 
E)  would; encourage a greater quantity supplied

Question 20

A minimum wage set above the equilibrium wage

Accepted Answer

A)  decreases the deadweight loss in the market. 
B)  decreases the workers' surplus because workers must spend resources looking for jobs. 
C)  increases the firm's surplus. 
D)  increases the market's efficiency. 
E)  has no effect on the market. 
A)  decreases the deadweight loss in the market. 
B)  decreases the workers' surplus because workers must spend resources looking for jobs. 
C)  increases the firm's surplus. 
D)  increases the market's efficiency. 
E)  has no effect on the market.

If a rent ceiling is set the equilibrium price,the effect can result in a housing .

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 to make the price support work,the government buys ________ million tons of sugar beets.

A rent ceiling creates a deadweight loss

The surplus created by a price floor will likely be

-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

-The above figure shows a labor market.Before the minimum wage of $8 an hour is imposed,employment equals workers; after the minimum wage of $8 an hour is imposed,employment equals workers.

A price floor in an agricultural market is called

Rent ceilings set below the equilibrium rent i.create a deadweight loss. ii.increase search activity. iii.result in a surplus of apartments.

When a minimum wage is introduced the equilibrium wage rate,the quantity of labor demanded and the quantity of labor supplied ,thus creating unemployment.

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

A price ceiling in the market for gasoline that is below the equilibrium price will lead to

The opportunity cost of an apartment in a rent controlled market is equal to

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 .

-The graph shows the labor market for teenagers in Atlanta.If the government sets a minimum wage of $6 an hour,then the maximum amount that a teenager would be willing to spend on job search is ________ an hour.

-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.As a result,there is a

If a rent ceiling is imposed that is less than the equilibrium rent,which of the following outcomes is most likely to occur?

A price support set above the equilibrium price does which of the following? i.decreases producer surplus ii.decreases consumer surplus iii.decreases the marginal cost of the last unit produced

-The above figure shows the market for DVDs.The government decides that all citizens deserve to watch affordable DVDs so a price ceiling of $12 per DVD is placed on DVDs.After this price ceiling is in effect,producer surplus equals ________.

Following a major natural disaster that destroys housing,a rent ceiling be an effective policy to increase the quantity of more affordable housing for displaced residents because it would .

A minimum wage set above the equilibrium wage

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

If a rent ceiling is set ________ the equilibrium price,the effect can result in a housing ________.

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 to make the price support work,the government buys ________ million tons of sugar beets.

A rent ceiling creates a deadweight loss

The surplus created by a price floor will likely be

-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

-The above figure shows a labor market.Before the minimum wage of $8 an hour is imposed,employment equals ________ workers; after the minimum wage of $8 an hour is imposed,employment equals ________ workers.

A price floor in an agricultural market is called

Rent ceilings set below the equilibrium rent i.create a deadweight loss. ii.increase search activity. iii.result in a surplus of apartments.

When a minimum wage is introduced ________ the equilibrium wage rate,the quantity of labor demanded ________ and the quantity of labor supplied ________,thus creating unemployment.

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

A price ceiling in the market for gasoline that is below the equilibrium price will lead to

The opportunity cost of an apartment in a rent controlled market is equal to

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 ________.

-The graph shows the labor market for teenagers in Atlanta.If the government sets a minimum wage of $6 an hour,then the maximum amount that a teenager would be willing to spend on job search is ________ an hour.

-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.As a result,there is a

If a rent ceiling is imposed that is less than the equilibrium rent,which of the following outcomes is most likely to occur?

A price support set above the equilibrium price does which of the following? i.decreases producer surplus ii.decreases consumer surplus iii.decreases the marginal cost of the last unit produced

-The above figure shows the market for DVDs.The government decides that all citizens deserve to watch affordable DVDs so a price ceiling of $12 per DVD is placed on DVDs.After this price ceiling is in effect,producer surplus equals ________.

Following a major natural disaster that destroys housing,a rent ceiling ________ be an effective policy to increase the quantity of more affordable housing for displaced residents because it would ________.

A minimum wage set above the equilibrium wage

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

If a rent ceiling is set the equilibrium price,the effect can result in a housing .

-The above figure shows a labor market.Before the minimum wage of $8 an hour is imposed,employment equals workers; after the minimum wage of $8 an hour is imposed,employment equals workers.

When a minimum wage is introduced the equilibrium wage rate,the quantity of labor demanded and the quantity of labor supplied ,thus creating unemployment.

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

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 .

Following a major natural disaster that destroys housing,a rent ceiling be an effective policy to increase the quantity of more affordable housing for displaced residents because it would .