Chapter 6_2: Markets in Action

Chapter 6_2: Markets in Action; Time: 40 phút

Question 1 - 3

Question 1: In the figure above, originally the apartment rental market is in short run and long run equilibrium with a rental price of $600 per month. Then the government imposes a rent ceiling of $500 per month. The loss of producer surplus as a result of the price ceiling is
a. $500,000 per month.
b. $50,000 per month.
c. $250,000 per month.
d. more than $500,000 per month.

Question 2: In the figure above, originally the apartment rental market is in short run and long run equilibrium with a rental price of $600 per month. Then the government imposes a rent ceiling of $500 per month. The loss of producer surplus
a. is smaller than the gain in consumer surplus.
b. could be smaller than, larger than, or the same size as the gain in consumer surplus.
c. is the same size as the gain in consumer surplus.
d. is larger than the gain in consumer surplus.

Question 3: In the figure above, originally the apartment rental market is in short run and long run equilibrium with a rental price of $600 per month. Then the government imposes a rent ceiling of $500 per month. The deadweight loss is borne by
a. all consumers and some producers
b. all producers and some consumers.
c. the producers only.
d. the consumers only.

Question 4: Effective rent controls
a. have no effect on search activity.
b. decrease search activity.
c. increase search activity.
d. shift the long-run housing supply curve rightward.

Question 5: One consequence of rent ceilings is that
a. a surplus of housing units develops.
b. it makes the long-run housing supply more elastic.
c. renters are no longer exploited by landlords.
d. search costs for housing increase.

Question 6: With rent controls, what mechanism might arise to bring about an equilibrium?
a. black market activity
b. more favorable leases offered to tenants
c. decreased search costs
d. increased advertising by landlords

Question 7: One common effect of rent ceilings in big cities is
a. that landlords charge "key money", high payments charged to new tenants for new locks and keys.
b. to reduce the search activity by those seeking shelter.
c. that landlords build more apartments.
d. to equalize the quantity of apartments demanded and the quantity supplied in neighborhoods.

Question 8: Price ceilings in the housing market create
a. inefficiency, but lead to the building of more housing.
b. efficiency, but often cause housing to deteriorate.
c. efficiency and lead to the building of more housing.
d. inefficiency and often cause housing to deteriorate.

Question 9: A price ceiling set below the equilibrium price ________ search activity and ________ the use of black markets.
a. decreases; increases
b. increases; increases
c. increases; decreases
d. decreases; decreases

Question 10: The ability of workers to freely enter and leave the low-skilled labor market makes the
a. long-run supply inelastic
b. short-run supply inelastic.
c. long-run supply elastic.
d. short-run supply elastic.

Question 11: In the market for low-skilled workers, labor-saving technology shifts the labor
a. demand curve leftward and lowers the wage rate.
b. demand curve rightward and raises the wage rate.
c. supply curve rightward and lowers the wage rate.
d. supply curve leftward and raises the wage rate.

Question 12: In the absence of a minimum wage, a leftward shift of the supply curve
a. increases demand
b. lowers the equilibrium wage.
c. raises the equilibrium wage.
d. None of the above answers is correct.

Question 13: In the short run, the supply of low-skilled labor tends to be
a. perfectly inelastic
b. perfectly elastic.
c. more elastic than in the long run.
d. less elastic than in the long run.

Question 14: In the absence of a minimum wage, a decrease in the demand for low-skilled labor will ________ the wage rate when the supply of low-skilled labor is ________.
a. lower; inelastic
b. raise; inelastic
c. raise; perfectly elastic
d. lower; perfectly elastic

Question 15: In the long run the supply of low-skilled labor is
a. elastic but is less elastic than in the short run.
b. elastic and is more elastic than in the short run.
c. inelastic but is more elastic than in the short run.
d. inelastic and is less elastic than in the short run.

Question 16: An effective minimum wage is a price
a. ceiling that results in a surplus of low-skilled labor.
b. floor that results in a shortage of low-skilled labor.
c. ceiling that results in a shortage of low-skilled labor.
d. floor that results in a surplus of low-skilled labor.

Question 17: An effective minimum wage is a price ________ that ________ the quantity of low-skilled labor demanded.
a. ceiling; decreases
b. floor; decreases
c. floor; increases
d. ceiling; increases

Question 18: The intent of minimum wage laws is to
a. raise the wages of the low-skilled workers.
b. increase the quantity of labor hired.
c. lower the wages of highly skilled workers.
d. increase the incentive to work harder.

Question 19: Strong minimum wage regulations
a. are favored by owners of supermarkets.
b. are favored by owners of fast-food restaurants.
c. encourage markets to adjust to change.
d. discourage markets from adjusting to change.

Question 20: If the minimum wage is set above the equilibrium wage, a supply and demand diagram of the low-skilled labor market will show unemployment as
a. a horizontal distance
b. the area of a triangle.
c. a vertical distance.
d. the area of a rectangle.

Question 21 - 24

Question 21: In the table above, what is the equilibrium wage rate in an unregulated market?
a. $6.00 per hour
b. $5.00 per hour
c. $7.00 per hour
d. $4.00 per hour

Question 22: In the table above, what is the level of unemployment (in millions of workers) if the minimum wage is set at $4 per hour?
a. 1
b. 3
c. 4
d. 0

Question 23: In the table above, the market is in equilibrium. Then a minimum wage is set at $7 per hour. The number of unemployed workers will be
a. 4 million
b. 0 million
c. 2 million.
d. 6 million.

Question 24: In the table above, the market is in equilibrium. Then a minimum wage is set at $7 per hour. The number of workers who lose their jobs will be
a. 1 million
b. 0 million
c. 3 million.
d. 5 million.

Question 25

Question 25: In the figure above, the shift from D0 to D1 could be caused by
a. imposing a minimum wage of $4.00
b. imposing a minimum wage of $5.00.
c. retraining workers.
d. introducing labor-saving technology.

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