week 8

An illegal market in which the equilibrium price exceeds the price ceiling is

• A) a rental market.

• B) a capital market.

• C) a black market.

• D) an efficient market.

• E) a housing market.

2) If the government imposes a maximum rent for housing that is above the equilibrium price, then you predict that

• A) the law will have no effect in the market for housing.

• B) the law will generate a shortage of housing.

• C) the law will create a surplus of housing.

• D) the demand curve for housing shifts rightward.

• E) the supply curve of housing shifts leftward.

3) When a price ceiling is set below the equilibrium price,

• A) the demand curve shifts leftward.

• B) the quantity supplied exceeds the quantity demanded.

• C) the quantity supplied equals the quantity demanded.

• D) the supply curve shifts rightward.

• E) the quantity demanded exceeds the quantity supplied.

4) Which one of the following is likely to be the outcome of a rent ceiling imposed below the equilibrium rent?

• A) a black market for rent-controlled housing

• B) long waiting lists of potential suppliers for rent-controlled housing

• C) a surplus of housing

• D) no search activity

• E) Both A and B are correct.

5) Refer to Figure 6.2.1. What is the equilibrium wage rate per hour in an unregulated market?

• A) $2

• B) $3

• C) $4

• D) $5

• E) $30

6) Refer to Figure 6.2.1. Suppose a $5 per hour minimum wage is in force. What is the lowest wage per hour an unemployed person would be willing to accept?

• A) $2

• B) $3

• C) $4

• D) $5

• E) $1

7) Suppose the equilibrium wage is $10 an hour. A minimum wage is a price ________ and that will change the quantity of employment if it is set at ________ an hour.

• A) floor; $12

• B) ceiling; $12

• C) floor; $8

• D) ceiling; $8

• E) floor; $10

8) Suppose the demand for gasoline is inelastic, but not perfectly inelastic, and the supply is elastic, but not perfectly elastic. A tax on gasoline is paid

• A) mostly by buyers.

• B) mostly by sellers.

• C) equally by buyers and sellers.

• D) totally by buyers.

• E) totally by sellers.

9) Refer to Figure 6.3.1 showing the market for frisbees before and after a tax is imposed. The tax on each frisbee is

• A) $0.40.

• B) $0.60.

• C) $1.00.

• D) $5.60.

• E) $6.60.

10) Refer to Figure 6.3.1 showing the market for frisbees before and after a tax is imposed. On each frisbee, the sellers' share of the tax is

• A) $0.40.

• B) $0.60.

• C) $1.00.

• D) $5.60.

• E) $6.60.