Question 1

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. C

Question 2

In a market with a price support set above the equilibrium price,

Accepted Answer

A)  consumers gain. 
B)  taxes on consumers decrease. 
C)  marginal benefit exceeds marginal cost. 
D)  the market is efficient. 
E)  farmers gain. 
A)  consumers gain. 
B)  taxes on consumers decrease. 
C)  marginal benefit exceeds marginal cost. 
D)  the market is efficient. 
E)  farmers gain. E

Question 3

-The figure above illustrates the bagel market.Which of the following statements is correct?

Accepted Answer

A)  With a price ceiling of $1.00 per bagel, the quantity demanded is equal to the quantity supplied. 
B)  With a price ceiling of $3.00 per bagel, the quantity demanded is greater than the quantity supplied. 
C)  With a price ceiling of $1.00 per bagel, there is a shortage of bagels. 
D)  Answers A and B are correct. 
E)  Answers B and C are correct. 
A)  With a price ceiling of $1.00 per bagel, the quantity demanded is equal to the quantity supplied. 
B)  With a price ceiling of $3.00 per bagel, the quantity demanded is greater than the quantity supplied. 
C)  With a price ceiling of $1.00 per bagel, there is a shortage of bagels. 
D)  Answers A and B are correct. 
E)  Answers B and C are correct. C

Question 4

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 5

How does the elasticity of demand for labor affect the deadweight loss from an increase in the minimum wage? Why?

Accepted Answer

The more elastic the demand for labor,th

Question 6

Nonunion labor is a substitute for union labor,so when the minimum wage ________,the demand for union labor ________.

Accepted Answer

A)  rises; decreases 
B)  decreases; increases 
C)  decreases; decreases 
D)  rises; increases 
E)  rises; remains the same 
A)  rises; decreases 
B)  decreases; increases 
C)  decreases; decreases 
D)  rises; increases 
E)  rises; remains the same

Question 7

In the housing market,if a rent ceiling of $600.00 is imposed when the equilibrium rent is $500.00,why will nothing change?

Accepted Answer

A rent ceiling is the maximum legal rent

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

-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 10

$$\begin{array} { c c c } 
\begin{array} { c } 
\text { Price } \
\text { (dollars per slice } \
\text { of pizza) }
\end{array} & \begin{array} { c } 
\text { Quantity supplied }\
\text { (slices of pizza } \
\text { per week) }
\end{array} & \begin{array} { c } 
\text {  Quantity demanded } \
\text { (slices of pizza } \
\text { per week) }
\end{array} \
\hline 1 & 10 & 50 \
2 & 20 & 40 \
3 & 30 & 30 \
4 & 40 & 20 \
5 & 50 & 10
\end{array}$$
-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 11

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 12

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

Accepted Answer

A rent ceiling is the maximum legal rent

Question 13

Explain why in cities such as New York City that have rent ceiling laws,so many people who work in the city commute from outside the city.

Accepted Answer

Rent ceilings decrease the quantity supp

Question 14

A price floor is a price

Accepted Answer

A)  below which a seller cannot legally sell. 
B)  above which a seller cannot legally sell. 
C)  that creates a shortage of the good if it is set above the equilibrium price. 
D)  Both answers A and C are correct. 
E)  Both answers B and C are correct. 
A)  below which a seller cannot legally sell. 
B)  above which a seller cannot legally sell. 
C)  that creates a shortage of the good if it is set above the equilibrium price. 
D)  Both answers A and C are correct. 
E)  Both answers B and C are correct.

Question 15

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

Accepted Answer

A)  decreases consumer surplus. 
B)  increases producer surplus. 
C)  decreases deadweight loss. 
D)  increases the quantity of housing rented. 
E)  is efficient. 
A)  decreases consumer surplus. 
B)  increases producer surplus. 
C)  decreases deadweight loss. 
D)  increases the quantity of housing rented. 
E)  is efficient.

Question 16

Suppose the current equilibrium wage rate for landscapers is $6.65 in Little Rock; $7.50 in St.Louis and $9.05 in Raleigh.An increase in the minimum wage to $7.50 per hour results in unemployment of landscapers in

Accepted Answer

A)  Little Rock and St. Louis. 
B)  only Raleigh. 
C)  Little Rock, St. Louis, and Raleigh. 
D)  only Little Rock. 
E)  St. Louis and Raleigh. 
A)  Little Rock and St. Louis. 
B)  only Raleigh. 
C)  Little Rock, St. Louis, and Raleigh. 
D)  only Little Rock. 
E)  St. Louis and Raleigh.

Question 17

Compare and contrast a price ceiling and a price floor.

Accepted Answer

A price ceiling is the maximum legal pri

Question 18

Suppose the current equilibrium wage rate for lifeguards in Houston is $7.85 an hour.A minimum wage law that creates a price floor of $8.50 an hour leads to

Accepted Answer

A)  a surplus of lifeguards in Houston. 
B)  a shortage of lifeguards in Houston. 
C)  no changes in the lifeguard market. 
D)  a change in the quantity of lifeguards supplied but no change in the quantity of lifeguards demanded. 
E)  an increase in the number of lifeguards employed. 
A)  a surplus of lifeguards in Houston. 
B)  a shortage of lifeguards in Houston. 
C)  no changes in the lifeguard market. 
D)  a change in the quantity of lifeguards supplied but no change in the quantity of lifeguards demanded. 
E)  an increase in the number of lifeguards employed.

Question 19

-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 20

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.

A price floor

In a market with a price support set above the equilibrium price,

-The figure above illustrates the bagel market.Which of the following statements is correct?

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

How does the elasticity of demand for labor affect the deadweight loss from an increase in the minimum wage? Why?

Nonunion labor is a substitute for union labor,so when the minimum wage ,the demand for union labor .

In the housing market,if a rent ceiling of $600.00 is imposed when the equilibrium rent is $500.00,why will nothing change?

Price supports are generally used 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 ________.

Price (dollars per slice of pizza) Quantity supplied (slices of pizza per week) Quantity demanded (slices of pizza per week) 1 10 50 2 20 40 3 30 30 4 40 20 5 50 10 -The demand and supply schedules for pizza are in the table above.A price ceiling of $4 per slice results in

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,

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

Explain why in cities such as New York City that have rent ceiling laws,so many people who work in the city commute from outside the city.

A price floor is a price

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 landscapers is $6.65 in Little Rock; $7.50 in St.Louis and $9.05 in Raleigh.An increase in the minimum wage to $7.50 per hour results in unemployment of landscapers in

Compare and contrast a price ceiling and a price floor.

Suppose the current equilibrium wage rate for lifeguards in Houston is $7.85 an hour.A minimum wage law that creates a price floor of $8.50 an hour leads to

-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?

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

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

A price floor

In a market with a price support set above the equilibrium price,

-The figure above illustrates the bagel market.Which of the following statements is correct?

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

How does the elasticity of demand for labor affect the deadweight loss from an increase in the minimum wage? Why?

Nonunion labor is a substitute for union labor,so when the minimum wage ________,the demand for union labor ________.

In the housing market,if a rent ceiling of $600.00 is imposed when the equilibrium rent is $500.00,why will nothing change?

Price supports are generally used 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 ________.

Price (dollars per slice of pizza) Quantity supplied (slices of pizza per week) Quantity demanded (slices of pizza per week) 1 10 50 2 20 40 3 30 30 4 40 20 5 50 10 -The demand and supply schedules for pizza are in the table above.A price ceiling of $4 per slice results in

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,

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

Explain why in cities such as New York City that have rent ceiling laws,so many people who work in the city commute from outside the city.

A price floor is a price

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 landscapers is $6.65 in Little Rock; $7.50 in St.Louis and $9.05 in Raleigh.An increase in the minimum wage to $7.50 per hour results in unemployment of landscapers in

Compare and contrast a price ceiling and a price floor.

Suppose the current equilibrium wage rate for lifeguards in Houston is $7.85 an hour.A minimum wage law that creates a price floor of $8.50 an hour leads to

-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?

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

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.

Nonunion labor is a substitute for union labor,so when the minimum wage ,the demand for union labor .