Economics questions

Question # 00003021 Posted By: neil2103 Updated on: 10/31/2013 03:22 AM Due on: 10/31/2013
Subject Economics Topic General Economics Tutorials:
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51. Which of the following is not a result of rent control?

a.

fewer new apartments offered for rent

b.

less maintenance provided by landlords

c.

bribery

d.

higher quality housing

52. A legal minimum on the price at which a good can be sold is called a price

a.

subsidy.

b.

floor.

c.

support.

d.

ceiling.

53. A price floor is

a.

a legal minimum on the price at which a good can be sold.

b.

often imposed when sellers of a good are successful in their attempts to convince the government that the market outcome is unfair without a price floor.

c.

a source of inefficiency in a market.

d.

All of the above are correct.

54. Which of the following is the most likely explanation for the imposition of a price floor on the market for corn?

a.

Policymakers have studied the effects of the price floor carefully, and they recognize that the price floor is advantageous for society as a whole.

b.

Buyers and sellers of corn have agreed that the price floor is good for both of them and have therefore pressured policy makers into imposing the price floor.

c.

Buyers of corn, recognizing that the price floor is good for them, have pressured policymakers into imposing the price floor.

d.

Sellers of corn, recognizing that the price floor is good for them, have pressured policymakers into imposing the price floor.

55. If a price floor is not binding, then

a.

the equilibrium price is above the price floor.

b.

the equilibrium price is below the price floor.

c.

it has no legal enforcement mechanism.

d.

More than one of the above is correct.

56. If a price floor is not binding, then

a.

there will be a surplus in the market.

b.

there will be a shortage in the market.

c.

there will be no effect on the market price or quantity sold.

d.

the market will be less efficient than it would be without the price floor.

57. If a nonbinding price floor is imposed on a market, then

a.

the quantity sold in the market will decrease.

b.

the quantity sold in the market will stay the same.

c.

the price in the market will increase.

d.

the price in the market will decrease.

58. A price floor will be binding only if it is set

a.

equal to the equilibrium price.

b.

above the equilibrium price.

c.

below the equilibrium price.

d.

either above or below the equilibrium price.

59. A price floor is binding when it is set

a.

above the equilibrium price, causing a shortage.

b.

above the equilibrium price, causing a surplus.

c.

below the equilibrium price, causing a shortage.

d.

below the equilibrium price, causing a surplus.

60. To say that a price floor is binding is to say that the price floor

a.

results in a shortage.

b.

is set below the equilibrium price.

c.

causes quantity supplied to exceed quantity demanded.

d.

All of the above are correct.

61. A surplus results when

a.

a nonbinding price floor is imposed on a market.

b.

a nonbinding price floor is removed from a market.

c.

a binding price floor is imposed on a market.

d.

a binding price floor is removed from a market.

62. The imposition of a binding price floor on a market causes quantity demanded to be

a.

greater than quantity supplied.

b.

less than quantity supplied.

c.

equal to quantity supplied.

d.

Both (a) and (b) are possible.

63. If a price floor is a binding constraint on a market, then

a.

the equilibrium price must be above the price floor.

b.

the quantity demanded must exceed the quantity supplied.

c.

sellers cannot sell all they want to sell at the price floor.

d.

buyers cannot buy all they want to buy at the price floor.

64. Which of the following observations would be consistent with the imposition of a binding price floor on a market?

a.

A smaller quantity of the good is bought and sold after the price floor becomes effective.

b.

A larger quantity of the good is demanded after the price floor becomes effective.

c.

A smaller quantity of the good is supplied after the price floor becomes effective.

d.

All of the above are correct.

65. If a binding price floor is imposed on the video game market, then

a.

the demand for video games will decrease.

b.

the supply of video games will increase.

c.

a surplus of video games will develop.

d.

All of the above are correct.

66. If a binding price floor is imposed on the video game market, then

a.

the quantity of video games demanded will decrease.

b.

the quantity of video games supplied will increase.

c.

a surplus of video games will develop.

d.

All of the above are correct.

67. Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200, and the government imposes a price floor of $250 per physical. As a result of the price floor,

a.

the demand curve for physicals shifts to the left.

b.

the supply curve for physicals shifts to the right.

c.

the quantity demanded of physicals decreases and the quantity of physicals doctors want to give increases.

d.

the number of physicals performed stays the same.

68. Suppose the government has imposed a price floor on televisions. Which of the following events could transform the price floor from one that is not binding into one that is binding?

a.

Firms expect the price of televisions to rise in the future.

b.

The number of firms selling televisions decreases.

c.

Consumers' income decreases, and televisions are a normal good.

d.

The number of consumers buying televisions increases.

69. Suppose the government has imposed a price floor on cellular phones. Which of the following events could transform the price floor from one that is binding to one that is not binding?

a.

Cellular phones become less popular.

b.

Traditional land line phones become more expensive.

c.

The components used to produce cellular phones become less expensive.

d.

Firms expect the price of cellular phones to fall in the future.

70. If the government removes a binding price floor from a market, then the price paid by buyers will

a.

increase and the quantity sold in the market will increase.

b.

increase and the quantity sold in the market will decrease.

c.

decrease and the quantity sold in the market will increase.

d.

decrease and the quantity sold in the market will decrease.


71. If the government removes a binding price floor from a market, then the price received by sellers will

a.

decrease and the quantity sold in the market will decrease.

b.

decrease and the quantity sold in the market will increase.

c.

increase and the quantity sold in the market will decrease.

d.

increase and the quantity sold in the market will increase.

72. When a binding price floor is imposed on a market,

a.

price no longer serves as a rationing device.

b.

the quantity supplied at the price floor exceeds the quantity that would have been supplied without the price floor.

c.

only some sellers benefit.

d.

All of the above are correct.

73. When a binding price floor is imposed on a market to benefit sellers,

a.

every seller in the market benefits.

b.

every buyer in the market benefits, too.

c.

every seller who wants to sell the good will be able to do so, but only if they appeal to the personal biases of the buyers.

d.

some sellers will not be able to sell any amount of the good.

74. When a binding price floor is imposed on a market to benefit sellers,

a.

no sellers actually do benefit.

b.

some sellers benefit, but no sellers are harmed.

c.

some sellers benefit and some sellers are harmed.

d.

all sellers benefit.

75. A binding price floor will reduce a firm's total revenue

a.

always.

b.

when demand is elastic.

c.

when demand is inelastic.

d.

never.

76. An example of a price floor is

a.

the regulation of gasoline prices in the U.S. in the 1970s.

b.

rent control.

c.

the minimum wage.

d.

any restriction on price that leads to a shortage.

77. The minimum wage is an example of

a.

a price ceiling.

b.

a price floor.

c.

a wage subsidy.

d.

a tax.

78. Which of the following is correct?

a.

Rent control and the minimum wage are both examples of price ceilings.

b.

Rent control is an example of a price ceiling, and the minimum wage is an example of a price floor.

c.

Rent control is an example of a price floor, and the minimum wage is an example of a price ceiling.

d.

Rent control and the minimum wage are both examples of price floors.

79. Minimum-wage laws dictate the

a.

average price employers must pay for labor.

b.

highest price employers may pay for labor.

c.

lowest price employers may pay for labor.

d.

the highest and lowest prices employers may pay for labor.

80. The U.S. Congress first instituted a minimum wage in

a.

1776.

b.

1812.

c.

1938.

d.

1975.

81. The minimum wage was instituted to ensure workers

a.

a middle-class standard of living.

b.

employment.

c.

a minimally adequate standard of living.

d.

unemployment compensation.

82. In 2007, the U.S. minimum wage according to federal law was

a.

$4.25 per hour.

b.

$5.15 per hour.

c.

$5.75 per hour.

d.

$7.25 per hour.

83. The U.S. minimum wage according to federal law is scheduled to increase to

a.

$5.15 per hour by 2010.

b.

$5.75 per hour by 2010.

c.

$7.25 per hour by 2010.

d.

$10.25 per hour by 2010.

84. Which of the following is not correct?

a.

Some states in the U.S. mandate minimum wages above the federal level.

b.

Most European nations have minimum-wage laws.

c.

The U.S. minimum wage is significantly higher than the minimum wages in France and the United Kingdom.

d.

The U.S. Congress first instituted a minimum wage with the Fair Labor Standards Act.

85. Which of the following is correct?

a.

Workers determine the supply of labor, and firms determine the demand for labor.

b.

Workers determine the demand for labor, and firms determine the supply of labor.

c.

The labor market is a single market for all different types of workers.

d.

The price of the product produced by labor adjusts to balance the supply of labor and the demand for labor.

86. If the minimum wage exceeds the equilibrium wage, then

a.

the quantity demanded of labor will exceed the quantity supplied.

b.

the quantity supplied of labor will exceed the quantity demanded.

c.

the minimum wage will not be binding.

d.

there will be no unemployment.

87. A minimum wage that is set above a market's equilibrium wage will result in

a.

an excess demand for labor, that is, unemployment.

b.

an excess demand for labor, that is, a shortage of workers.

c.

an excess supply of labor, that is, unemployment.

d.

an excess supply of labor, that is, a shortage of workers.

88. A minimum wage that is set below a market's equilibrium wage will result in

a.

an excess demand for labor, that is, unemployment.

b.

an excess demand for labor, that is, a shortage of workers.

c.

an excess supply of labor, that is, unemployment.

d.

None of the above is correct.

89. A binding minimum wage

a.

alters both the quantity demanded and quantity supplied of labor.

b.

affects only the quantity of labor demanded; it does not affect the quantity of labor supplied.

c.

has no effect on the quantity of labor demanded or the quantity of labor supplied.

d.

causes only temporary unemployment, since the market will adjust and eliminate any temporary surplus of workers.

90. The minimum wage, if it is binding, raises the incomes of

a.

no workers.

b.

only those workers who cannot find jobs.

c.

only those workers who have jobs.

d.

all workers.

91. The minimum wage, if it is binding, lowers the incomes of

a.

no workers.

b.

only those workers become unemployed.

c.

only those workers who have jobs.

d.

all workers.

92. Which of the following is not correct?

a.

The economy contains many labor markets for different types of workers.

b.

The impact of the minimum wage depends on the skill and experience of the worker.

c.

The minimum wage is binding for workers with high skills and much experience.

d.

The minimum wage is not binding when the equilibrium wage is above the minimum wage.

93. The minimum wage has its greatest impact on the market for

a.

female labor.

b.

older labor.

c.

black labor.

d.

teenage labor.

94. The minimum wage does not apply to

a.

jobs for teenagers.

b.

jobs for members of minority groups.

c.

unpaid internships.

d.

jobs that include on-the-job training.

95. Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage depresses teenage employment by about

a.

0 percent.

b.

1 to 3 percent.

c.

5 to 7 percent.

d.

10 percent.

96. Which of the following is correct?

a.

Studies of the effects of the minimum wage typically find that a 10 percent increase in the minimum wage raises the average wage of teenagers by 10 percent.

b.

The drop in teenage employment caused by a 10 percent increase in the minimum wage is not significant.

c.

The minimum wage is more often binding for teenagers than for other members of the labor force.

d.

Enforcement of minimum-wage laws is perfect.

97. Which of the following is notcorrect?

a.

In a 2006 survey of Ph.D. economists, 47 percent favored eliminating the minimum wage.

b.

In a 2006 survey of Ph.D. economists, 14 percent would maintain the minimum wage at its current level.

c.

In a 2006 survey of Ph.D. economists, 38 percent would increase the minimum wage.

d.

In a 2006 survey of Ph.D. economists, 10 percent would decrease the minimum wage.

98. Advocates of the minimum wage

a.

deny that the minimum wage produces any adverse effects.

b.

emphasize the benefits to teenagers of increases in the minimum wage.

c.

emphasize the low annual incomes of those who work for the minimum wage.

d.

All of the above are correct.

99. Opponents of the minimum wage point out that the minimum wage

a.

encourages teenagers to drop out of school.

b.

prevents some workers from getting needed on-the-job training.

c.

contributes to the problem of unemployment.

d.

All of the above are correct.

100.The proportion of minimum-wage earners who are in families with incomes below the poverty line is

a.

less than one-third.

b.

between one-third and one-half.

c.

between one-half and two-thirds.

d.

greater than two-thirds.

101.There are several criticisms of the minimum wage. Which of the following is not one of those criticisms?

a.

The minimum wage often hurts those people who it is intended to help.

b.

The minimum wage results in an excess supply of low-skilled labor.

c.

The minimum wage prevents some unskilled workers from getting needed on-the-job training.

d.

The minimum wage fails to raise the wage of any employed person.

102.An outcome that can result from either a price ceiling or a price floor is

a.

a surplus in the market.

b.

a shortage in the market.

c.

a nonbinding price control.

d.

long lines of frustrated buyers.

103.An outcome that can result from either a price ceiling or a price floor is

a.

an enhancement of efficiency.

b.

undesirable rationing mechanisms.

c.

a surplus.

d.

a shortage.

104.Price ceilings and price floors that are binding

a.

are desirable because they make markets more efficient and more fair.

b.

cause surpluses and shortages to persist since price cannot adjust to the market equilibrium price.

c.

can have the effect of restoring a market to equilibrium.

d.

are imposed because they can make the poor in the economy better off without causing adverse effects.

105.When government imposes a price ceiling or a price floor on a market,

a.

price no longer serves as a rationing device.

b.

efficiency in the market is enhanced.

c.

shortages and surpluses are eliminated.

d.

buyers and sellers both become better off.

106.You have responsibility for economic policy in the country of Freedonia. Recently, the neighboring country of Sylvania has cut off all exports of oranges to Freedonia. Harpo, who is one of your advisors, suggests that you should impose a binding price ceiling in order to avoid a shortage of oranges. Chico, another one of your advisors, argues that without a binding price floor, a shortage will certainly develop. Zeppo, a third advisor, says that the best way to avoid a shortage of oranges is to take no action at all. Which of your three advisors is most likely to have studied economics?

a.

Harpo

b.

Chico

c.

Zeppo

d.

Apparently, all three advisors have studied economics, but their views on positive economics are different.

Table 6-1

Price

Quantity

Demanded

Quantity

Supplied

$0

12

0

$1

10

2

$2

8

4

$3

6

6

$4

4

8

$5

2

10

$6

0

12

107.Refer to Table 6-1. Which of the following price ceilings would be binding in this market?

a.

$2

b.

$3

c.

$4

d.

$5

108.Refer to Table 6-1. Which of the following price floors would be binding in this market?

a.

$1

b.

$2

c.

$3

d.

$4

109.Refer to Table 6-1. Suppose the government imposes a price ceiling of $1 on this market. What will be the size of the shortage in this market?

a.

0 units

b.

2 units

c.

8 units

d.

10 units

110.Refer to Table 6-1. Suppose the government imposes a price ceiling of $5 on this market. What will be the size of the shortage in this market?

a.

0 units

b.

2 units

c.

8 units

d.

10 units

111.Refer to Table 6-1. Suppose the government imposes a price floor of $1 on this market. What will be the size of the surplus in this market?

a.

0 units

b.

2 units

c.

8 units

d.

10 units

112.Refer to Table 6-1. Suppose the government imposes a price floor of $5 on this market. What will be the size of the surplus in this market?

a.

0 units

b.

2 units

c.

8 units

d.

10 units

Price

Quantity

Demanded

Quantity

Supplied

$0

250

0

$5

200

75

$10

150

150

$15

100

225

$20

50

300

$25

0

375

113.Refer to Table 6-2. Which of the following statements is correct?

a.

A price ceiling set at $5 will be binding and will result in a shortage of 50 units.

b.

A price ceiling set at $5 will be binding and will result in a shortage of 75 units.

c.

A price ceiling set at $5 will be binding and will result in a shortage of 125 units.

d.

A price ceiling set at $5 will not be binding.

114.Refer to Table 6-2. Which of the following statements is correct?

a.

A price ceiling set at $15 will be binding and will result in a shortage of 50 units.

b.

A price ceiling set at $15 will be binding and will result in a shortage of 100 units.

c.

A price ceiling set at $15 will be binding and will result in a shortage of 125 units.

d.

A price ceiling set at $15 will not be binding.

115.Refer to Table 6-2. Which of the following statements is correct?

a.

A price floor set at $20 will be binding and will result in a surplus of 50 units.

b.

A price floor set at $20 will be binding and will result in a surplus of 100 units.

c.

A price floor set at $20 will be binding and will result in a surplus of 250 units.

d.

A price floor set at $20 will not be binding.

116.Refer to Table 6-2. Which of the following statements is correct?

a.

A price floor set at $5 will be binding and will result in a surplus of 50 units.

b.

A price floor set at $5 will be binding and will result in a surplus of 75 units.

c.

A price floor set at $5 will be binding and will result in a surplus of 125 units.

d.

A price floor set at $5 will not be binding.

Table 6-3

The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price floor $2 above the equilibrium price in this market.

Price

Quantity Demanded

Quantity Supplied

$0

15

0

$1

13

3

$2

11

6

$3

9

9

$4

7

12

$5

5

15

$6

3

18

117.Refer to Table 6-3. How many units of the good are sold after the imposition of the price floor?

a.

5

b.

9

c.

10

d.

15

118.Refer to Table 6-3. Following the imposition of a price floor $2 above the equilibrium price, irate buyers convince Congress to repeal the price floor and to impose a price ceiling $1 below the former price floor. The resulting market price is

a.

$2.

b.

$3.

c.

$4.

d.

$5.

119.Refer to Table 6-3. Following the imposition of a price floor $2 above the equilibrium price, irate buyers convince Congress to repeal the price floor and to impose a price ceiling $1 below the former price floor. The resulting shortage is

a.

0 units.

b.

2 units.

c.

5 units.

d.

7 units.

A

Table 6-4

The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price floor $3 above the equilibrium price in this market.

Price

Quantity Demanded

Quantity Supplied

$0

15

0

$1

13

3

$2

11

6

$3

9

9

$4

7

12

$5

5

15

$6

3

18

120.Refer to Table 6-4. How many units of the good are sold after the imposition of the price floor?

a.

3

b.

9

c.

15

d.

18

121.Refer to Table 6-4. Following the imposition of a price floor $3 above the equilibrium price, irate buyers convince Congress to repeal the price floor and to impose a price ceiling $1 below the former price floor. The resulting market price is

a.

$2.

b.

$3.

c.

$4.

d.

$5.

122.Refer to Table 6-4. Following the imposition of a price floor $3 above the equilibrium price, irate buyers convince Congress to repeal the price floor and to impose a price ceiling $1 below the former price floor. The resulting shortage is

a.

0 units.

b.

4 units.

c.

5 units.

d.

10 units.

Figure 6-1

Panel (a) Panel (b)

123.Refer to Figure 6-1. A binding price ceiling is shown in

a.

panel (a) but not panel (b).

b.

panel (b) but not panel (a).

c.

both panel (a) and panel (b).

d.

neither panel (a) nor panel (b).

124.Refer to Figure 6-1. In which panel(s) of the figure would there be a shortage of the good at the price ceiling?

a.

panel (a) but not panel (b)

b.

panel (b) but not panel (a)

c.

both panel (a) and panel (b)

d.

neither panel (a) nor panel (b)

125.Refer to Figure 6-1. The situation in panel (a) may be described as one in which

a.

the price ceiling is not binding.

b.

the price ceiling really functions as a price floor.

c.

a surplus of the good will be observed.

d.

Both (b) and (c) are correct.

Figure 6-2

Panel (a) Panel (b)

126.Refer to Figure 6-2. A binding price floor is shown in

a.

both panel (a) and panel (b).

b.

panel (a) but not panel (b).

c.

panel (b) but not panel (a).

d.

neither panel (a) nor panel (b).

127.Refer to Figure 6-2. In panel (b), there will be

a.

a shortage of wheat.

b.

equilibrium in the market.

c.

a surplus of wheat.

d.

lines of people waiting to buy wheat.

Figure 6-3

128.Refer to Figure 6-3. Which of the following price ceilings would be binding in this market?

a.

$8.

b.

$10.

c.

$12.

d.

$14.

129.Refer to Figure 6-3. Which of the following price floors would be binding in this market?

a.

$6.

b.

$8.

c.

$10.

d.

$12.


130.Refer to Figure 6-3. Which of the following statements is correct?

a.

A price ceiling set at $12 would be binding, but a price ceiling set at $8 would not be binding.

b.

A price floor set at $8 would be binding, but a price ceiling set at $8 would not be binding.

c.

A price ceiling set at $9 would result in a surplus.

d.

A price floor set at $11 would result in a surplus.

131.Refer to Figure 6-3. If the government imposes a price ceiling of $8 on this market, then there will be a

a.

shortage of 0.

b.

shortage of 10.

c.

shortage of 20.

d.

shortage of 40.

132.Refer to Figure 6-3. If the government imposes a price ceiling of $12 on this market, then there will be a

a.

shortage of 0.

b.

shortage of 10.

c.

shortage of 20.

d.

shortage of 40.

133.Refer to Figure 6-3. If the government imposes a price floor of $6 on this market, then there will be a

a.

surplus of 0.

b.

surplus of 20.

c.

surplus of 30.

d.

surplus of 40.

134.Refer to Figure 6-3. If the government imposes a price floor of $14 on this market, then there will be a

a.

surplus of 0.

b.

surplus of 20.

c.

surplus of 30.

d.

surplus of 40.

135.Refer to Figure 6-3. In which of the following cases would sellers have to develop a rationing mechanism?

a.

A price ceiling is set at $8.

b.

A price ceiling is set at $12.

c.

A price floor is set at $8.

d.

A price floor is set at $12.

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