1. A price ceiling is

A.a maximum legal price.

B.a minimum legal price.

C.a market?determined price.

D.the highest price at which the quantity demanded equals the quantity supplied.

E.an equilibrium price.

2. A rent ceiling set below the equilibrium rent

A.eliminates discrimination by landlords.

B.ensures the availability of enough low?rent apartments in a city.

C.results in all renters and potential renters being better off.

D.creates a situation in which the quantity demanded of housing is greater than quantity supplied.

E.ensures that landlords earn a reasonable rate of profit on apartments.

3. A price ceiling in the market for fuel oil that is below the equilibrium price will

A.increase the supply of fuel oil.

B.lead to the quantity supplied of fuel oil exceeding the quantity demanded.

C.decrease the demand for fuel oil.

D.lead to the quantity demanded of fuel oil exceeding the quantity supplied.

E.have no effect in the market for fuel oil.

4. A rent ceiling below the equilibrium rent

A.can create a black market.

B.increases the quantity of housing supplied.

C.limits search because people need no longer search for cheap apartments.

D.has no effect on the housing market because the ceiling is below the equilibrium.

E.is an example of a price floor.

5. In a housing market with a rent ceiling below the equilibrium?rent, apartment seekers spend more time searching for an apartment than they would in a housing market without a rent ceiling. Why does this difference?exist?

A.In the market with the rent?ceiling, there is a wide variety in the quality of apartments for rent.

B.In the market with the rent?ceiling, the quantity of housing demanded is greater than quantity supplied at the ceiling price.

C.In the market with the rent?ceiling, renters are searching for the best buy in apartments.

D.The premise of the question is incorrect because people spend less time searching with a rent ceiling since they no longer need to look for a low?priced apartment.

E.The premise of the question is incorrect because there is no difference in the search time between a market with a rent ceiling and one without a ceiling.

6. In the labor?market, as wages?rise, households

A.increase the supply of labor.

B.decrease the quantity of labor demanded.

C.decrease the quantity of labor supplied.

D.increase the quantity of labor demanded.

E.increase the quantity of labor supplied.

7. A price floor is

A.usually equal to the equilibrium price established before the government imposed the price floor.

B.the lowest legal price at which a good or service can be traded.

C.the highest possible legal price that can be charged for a good or service.

D.almost always equal to the price ceiling.

E.a legal price of zero that can be charged for a good or service.

8. A price floor

A.changes the price and quantity if it is set below the equilibrium price.

B.changes the price and quantity if it is set above the equilibrium price.

C.changes the price and quantity only if it equals the equilibrium price.

D.does not create a black market if it is set above the equilibrium price.

E.changes the equilibrium price if it is imposed in black markets.

9. 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

A.only Little Rock.

B.St. Louis and Raleigh.

C.Little?Rock, St.?Louis, and Raleigh.

D.only Raleigh.

E.Little Rock and St. Louis.

10. A minimum wage set above the equilibrium wage rate creates

A.efficiency because few workers lose their jobs.

B.efficiency because it increases most?workers' wages.

C.efficiency because workers can earn a living wage.

D.inefficiency because it creates excessive employment.

E.inefficiency and a deadweight loss.

11. A minimum wage law

A.increases the time spent searching by workers who cannot find a job.

B.increases employment.

C.lowers the wage rate of workers who are able to get a job.

D.creates efficiency in the labor market.

E.must be set below the equilibrium wage rate in order to have an impact.

The figure shows the labor market in a region. In which of the following cases would the amount of unemployment be the largest? Wage rate (dollars per hour) 12 O A. when the market is at its equilibrium, with no minimum wage 10 O B. when a minimum wage of $6 an hour is imposed CO O C. when a minimum wage of $4 an hour is imposed O D. when a minimum wage of $8 an hour is imposed O O E. None of the above because the market will adjust so that there is no unemployment. 2 D 0 20 40 60 80 100 120 140 Quantity (thousands of workers)The figure shows the market for 2 bedroom townhomes in San Diego. If a rent ceiling is set at $1,000 per Rent (dollars per month) month then there is a 1,500- O A. shortage equal to 100,000 townhomes. 1.400 O B. shortage equal to 150,000 townhomes. 1,300 O C. surplus equal to 100,000 townhomes. S O D. shortage equal to 250,000 townhomes. 1,200 O E. surplus equal to 150,000 townhomes. 1,100 Rent 1,000 ceiling 900 0 100 150 200 250 300 350 400 Quantity (thousands of units)The figure shows the market for finish carpenters in Bozeman. If there is a minimum wage set at $18, then Wage rate (dollars per hour) there will be 22 O A. a surplus of 200 workers. 20 O B. no unemployment of workers and no surplus of workers. 18 Minimum O C. unemployment of 400 workers. wage O D. a surplus of 400 workers. 16 O E. unemployment of 200 workers. 14 12 10 LD 0 100 200 300 400 500 600 700 Quantity (thousands of workers)The figure illustrates the bagel market. Which of the following statements is correct? Price (dollars per bagel) O A. With a price ceiling of $3.00 per bagel, the quantity demanded is greater than the quantity supplied. 3.50 O B. With a price ceiling of $1.00 per bagel, the quantity demanded is equal to the quantity supplied. 3.00 O C. With a price ceiling of $1.00 per bagel, there is a shortage of bagels. 2.50 O D. Answers A and B are correct. O E. Answers B and C are correct. 2.00 1.50 1.00 X 0.50 0 Quantity (bagels per day)