Question 1

-The above figure shows a labor market with minimum wage equal to $16.In this figure, after taking account of search costs, what area equals the workers' 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 D

Question 2

When a rent ceiling below the equilibrium rent is put in place, the outcome is

Accepted Answer

A) efficient because marginal benefit equals marginal cost. 
B) inefficient because marginal benefit equals marginal cost. 
C) inefficient because marginal benefit is greater than marginal cost. 
D) inefficient because marginal benefit is less than marginal cost. 
E) efficient because marginal benefit is greater than marginal cost. 
A) efficient because marginal benefit equals marginal cost. 
B) inefficient because marginal benefit equals marginal cost. 
C) inefficient because marginal benefit is greater than marginal cost. 
D) inefficient because marginal benefit is less than marginal cost. 
E) efficient because marginal benefit is greater than marginal cost. C

Question 3

In the labor market, as wages rise, households

Accepted Answer

A) decrease the quantity of labor supplied. 
B) increase the quantity of labor supplied. 
C) decrease the quantity of labor demanded. 
D) increase the quantity of labor demanded. 
E) increase the supply of labor. 
A) decrease the quantity of labor supplied. 
B) increase the quantity of labor supplied. 
C) decrease the quantity of labor demanded. 
D) increase the quantity of labor demanded. 
E) increase the supply of labor. B

Question 4

-The above figure shows a labor market with a minimum wage of $8 an hour.The value of the resources workers are willing to use in their job search equals the distance between point ________ and point ________.

Accepted Answer

A) a; d 
B) a; b 
C) b; c 
D) a; c 
E) c; d 
A) a; d 
B) a; b 
C) b; c 
D) a; c 
E) c; d

Question 5

Both price supports and a price floor can

Accepted Answer

A) create a deadweight loss. 
B) decrease output below the equilibrium quantity. 
C) decrease the price below the equilibrium price. 
D) increase consumer surplus. 
E) have no effect on producer surplus. 
A) create a deadweight loss. 
B) decrease output below the equilibrium quantity. 
C) decrease the price below the equilibrium price. 
D) increase consumer surplus. 
E) have no effect on producer surplus.

Question 6

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 7

A minimum wage law

Accepted Answer

A) lowers the wage rate of workers who are able to get a job. 
B) increases employment. 
C) increases the time spent searching by workers who cannot find a job. 
D) creates efficiency in the labor market. 
E) must be set below the equilibrium wage rate in order to have an impact. 
A) lowers the wage rate of workers who are able to get a job. 
B) increases employment. 
C) increases the time spent searching by workers who cannot find a job. 
D) creates efficiency in the labor market. 
E) must be set below the equilibrium wage rate in order to have an impact.

Question 8

The unemployment caused by minimum wage would be larger if

Accepted Answer

A) both labor demand and labor supply are more elastic. 
B) both labor demand and labor supply are more inelastic. 
C) minimum wage is set equal to the equilibrium wage rate. 
D) minimum wage is set below the equilibrium wage rate. 
E) both labor demand and labor supply are perfectly inelastic. 
A) both labor demand and labor supply are more elastic. 
B) both labor demand and labor supply are more inelastic. 
C) minimum wage is set equal to the equilibrium wage rate. 
D) minimum wage is set below the equilibrium wage rate. 
E) both labor demand and labor supply are perfectly inelastic.

Question 9

Suppose the city of Chicago imposes a rent control program that fixes rents at $400 below the equilibrium rent.With this plan

Accepted Answer

A) the quantity of apartments demanded will increase. 
B) the quantity of apartments supplied will increase. 
C) young people and poor people will have an easier time finding apartments. 
D) the deadweight loss in Chicago's apartment market will be eliminated. 
E) there will be a surplus of apartments offered for rent. 
A) the quantity of apartments demanded will increase. 
B) the quantity of apartments supplied will increase. 
C) young people and poor people will have an easier time finding apartments. 
D) the deadweight loss in Chicago's apartment market will be eliminated. 
E) there will be a surplus of apartments offered for rent.

Question 10

-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 11

With a rent ceiling set below the equilibrium rent,
I∙all renters are able to rent apartments at a lower rent.
Ii∙there is a shortage of apartments.
Iii∙the quantity of apartments supplied does not change because buildings cannot be moved.

Accepted Answer

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

Question 12

A rent ceiling in a housing market

Accepted Answer

A) makes all rents lower than the ceiling illegal to charge. 
B) is set above the equilibrium rent in order to have an effect. 
C) increases the time people spend searching for housing. 
D) Both answers B and C are correct. 
E) Both answers A and C are correct. 
A) makes all rents lower than the ceiling illegal to charge. 
B) is set above the equilibrium rent in order to have an effect. 
C) increases the time people spend searching for housing. 
D) Both answers B and C are correct. 
E) Both answers A and C are correct.

Question 13

We know that the minimum wage causes unemployment.So, why does the government impose one?

Accepted Answer

The main reason for the minimum wage is

Question 14

A regulation that sets the highest price at which it is legal to trade a good is a

Accepted Answer

A) production quota. 
B) price floor. 
C) price support. 
D) price ceiling. 
E) subsidy. 
A) production quota. 
B) price floor. 
C) price support. 
D) price ceiling. 
E) subsidy.

Question 15

-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 ________.

Accepted Answer

A) $15 per ton; 100 million tons 
B) $14 per ton; 250 million tons 
C) $12 per ton; 300 million tons 
D) $12 per ton; 250 million tons 
E) $15 per ton; 400 million tons 
A) $15 per ton; 100 million tons 
B) $14 per ton; 250 million tons 
C) $12 per ton; 300 million tons 
D) $12 per ton; 250 million tons 
E) $15 per ton; 400 million tons

Question 16

-A minimum wage set above the equilibrium wage rate creates

Accepted Answer

A) efficiency because it increases most workers' wages. 
B) efficiency because few workers lose their jobs. 
C) efficiency because workers can earn a living wage. 
D) inefficiency and a deadweight loss. 
E) inefficiency because it creates excessive employment. 
A) efficiency because it increases most workers' wages. 
B) efficiency because few workers lose their jobs. 
C) efficiency because workers can earn a living wage. 
D) inefficiency and a deadweight loss. 
E) inefficiency because it creates excessive employment.

Question 17

In a housing market with no rent ceilings, the equilibrium rent is that for which the quantity of apartments demanded

Accepted Answer

A) equals the quantity supplied. 
B) is greater than the quantity supplied. 
C) is less than the quantity supplied. 
D) might be greater than, equal to, or less than the quantity supplied depending on whether the supply curve is upward sloping, horizontal, or vertical. 
E) None of the above answers is correct because without rent ceilings there is no equilibrium rent. 
A) equals the quantity supplied. 
B) is greater than the quantity supplied. 
C) is less than the quantity supplied. 
D) might be greater than, equal to, or less than the quantity supplied depending on whether the supply curve is upward sloping, horizontal, or vertical. 
E) None of the above answers is correct because without rent ceilings there is no equilibrium rent.

Question 18

-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.

Question 19

Rent ceilings set below the equilibrium rent
I∙create a deadweight loss.
Ii∙increase search activity.
Iii∙encourage landlords to charge a high price for new locks and keys, called "key money."

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 20

-The graph shows the market for rental housing in Little Rock.The market for apartments is efficient when ________.

Accepted Answer

A) the quantity of apartments demanded is 12,000 a month 
B) the rent ceiling is set at $300 a month 
C) there is no rent ceiling 
D) the quantity of apartments supplied is 6,000 a month 
E) the rent charged is less than $450 
A) the quantity of apartments demanded is 12,000 a month 
B) the rent ceiling is set at $300 a month 
C) there is no rent ceiling 
D) the quantity of apartments supplied is 6,000 a month 
E) the rent charged is less than $450

-The above figure shows a labor market with minimum wage equal to $16.In this figure, after taking account of search costs, what area equals the workers' surplus?

When a rent ceiling below the equilibrium rent is put in place, the outcome is

In the labor market, as wages rise, households

-The above figure shows a labor market with a minimum wage of $8 an hour.The value of the resources workers are willing to use in their job search equals the distance between point and point .

Both price supports and a price floor can

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

A minimum wage law

The unemployment caused by minimum wage would be larger if

Suppose the city of Chicago imposes a rent control program that fixes rents at $400 below the equilibrium rent.With this plan

-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?

With a rent ceiling set below the equilibrium rent, I∙all renters are able to rent apartments at a lower rent. Ii∙there is a shortage of apartments. Iii∙the quantity of apartments supplied does not change because buildings cannot be moved.

A rent ceiling in a housing market

We know that the minimum wage causes unemployment.So, why does the government impose one?

A regulation that sets the highest price at which it is legal to trade a good is a

-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 .

-A minimum wage set above the equilibrium wage rate creates

In a housing market with no rent ceilings, the equilibrium rent is that for which the quantity of apartments demanded

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

Rent ceilings set below the equilibrium rent I∙create a deadweight loss. Ii∙increase search activity. Iii∙encourage landlords to charge a high price for new locks and keys, called "key money."

-The graph shows the market for rental housing in Little Rock.The market for apartments is efficient when ________.

Getting Started

The Usand 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 above figure shows a labor market with minimum wage equal to $16.In this figure, after taking account of search costs, what area equals the workers' surplus?

When a rent ceiling below the equilibrium rent is put in place, the outcome is

In the labor market, as wages rise, households

-The above figure shows a labor market with a minimum wage of $8 an hour.The value of the resources workers are willing to use in their job search equals the distance between point ________ and point ________.

Both price supports and a price floor can

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

A minimum wage law

The unemployment caused by minimum wage would be larger if

Suppose the city of Chicago imposes a rent control program that fixes rents at $400 below the equilibrium rent.With this plan

-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?

With a rent ceiling set below the equilibrium rent, I∙all renters are able to rent apartments at a lower rent. Ii∙there is a shortage of apartments. Iii∙the quantity of apartments supplied does not change because buildings cannot be moved.

A rent ceiling in a housing market

We know that the minimum wage causes unemployment.So, why does the government impose one?

A regulation that sets the highest price at which it is legal to trade a good is a

-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 ________.

-A minimum wage set above the equilibrium wage rate creates

In a housing market with no rent ceilings, the equilibrium rent is that for which the quantity of apartments demanded

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

Rent ceilings set below the equilibrium rent I∙create a deadweight loss. Ii∙increase search activity. Iii∙encourage landlords to charge a high price for new locks and keys, called "key money."

-The graph shows the market for rental housing in Little Rock.The market for apartments is efficient when ________.

Getting Started

The Usand 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

-The above figure shows a labor market with a minimum wage of $8 an hour.The value of the resources workers are willing to use in their job search equals the distance between point and point .

-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 .