1. Which of the following is a result of price controls? (1) Additional inequities (2) An equitable outcome (3) An efficient outcome (4) Goods going to buyers who value them most 2. An effective minimum wage law can be expected to: (1) clear the market for blue-collar workers. (2) cause unemployment for some unskilled workers. (3) increase employment for some affected workers. (4) increase the number of firms in those industries where the law is effective. 3. Under what circumstances will the consumers of a good end up paying the full amount of a tax? (1) Demand is perfectly inelastic and supply is not. (2) Demand is more elastic than supply. (3) Demand is less elastic than supply. (4) Supply is perfectly inelastic and demand is not. 4. What results from a tax placed on the sellers of blueberries? (1) It increases costs, lowers profit, and shifts supply to the right (downward). (2) It increases costs, lowers profit, and shifts supply to the left (upward). (3) It reduces costs, raises profit, and shifts supply to the left (upward). (4) It reduces costs, lowers profit, and shifts supply to the right (downward). 5. Which of the following statements regarding the presence of price ceilings and the 1970s gas crisis in Canada and the United States is FALSE? (1) Since Canada had no price ceilings, when the supply of gas decreased, a new equilibrium price was found where the demand curve and the new supply curve intersected. (2) Canada had no price ceilings, but the reason there wasn't a shortage of gas is because Canadians significantly decreased their demand of gas when the supply of gas decreased (3) Since the US had a price ceiling, when the supply of gas decreased, the quantity demanded at the ceiling price was much larger than the quantity supplied by the producers. (4) Since the US had a price ceiling, a gas shortage was created and gas stations often had long lines.6. Over time, what happens to housing shortages caused by rent control? (1) They increase, because the demand and supply curves for housing are more elastic in the long run. (2) They increase, because the demand and supply curves for housing are more inelastic in the long run. (3) They decrease, because the demand and supply curves for housing are more inelastic in the long run. (4) They decrease, because the demand and supply curves for housing are more elastic in the long run. 7. Under rent control, landlords cease to be responsive to tenants' concerns about the quality of the housing because: (1) they see it as a way of protesting against the controls. 2) they know they can never please their tenants. (3) the law no longer requires them to maintain their buildings. (4) they lose the incentive to maintain and improve their property. 8. What will happen if a newly imposed minimum wage is set above the equilibrium wage in a labour market? (1) The equilibrium wage in the market will rise. (2) Every worker who is earning a wage below the minimum will be better off. 3) Workers earning more than the minimum wage will be worse off. (4) Some workers will get a raise and some workers will lose their jobs. 9. Wage subsidies: (1) lower the standard of living. (2) have no impact on taxes. 3) encourage firms to hire people. (4) are illegal in Canada. 10. Assume the demand for electric cars is highly elastic, while the supply for electric cars is highly inelastic. A tax imposed on buyers of electric cars will: (1) have a large impact on the sales of electric cars. 2) be equally shared by sellers and consumers of electric cars. 3) be mainly borne by sellers of electric cars. (4) be mainly borne by the consumers of electric cars. 11. A binding price floor will create: (1) prices lower than equilibrium. 2) quantity demanded higher than equilibrium quantity. (3) an excess of supply (surplus). (4) a shortage of supply.THE NEXT QUESTION IS BASED ON THE FOLLOWING GRAPH: Price A $9 8 7 D D 10 20 30 40 50 60 70 Quantity 12. After a tax of $3 is imposed on buyers, what is the price buyers pay? (1) $5 (2) $6 (3) $7 (4) $8 13. A tax of $0.30 per bag on the sellers of popcorn will cause the price the buyers pay to and the effective price the sellers receive to (1) rise; rise (2) rise; fall (3) fall; fall (4) fall; riseTHE NEXT TWO (2) QUESTIONS ARE BASED ON THE FOLLOWING INFORMATION: Rental Panel (a) Rental Panel (b) Price Price D Controlled Rent Controlled Hent Quantity of Quantity of Apartments Apartments Rental Price Panel (c) S Controlled Rent D Quantity of Apartments 14. Which panel best represents a binding rent control in the short run? (1) Panel (a) (2) Panel (b) (3) Panel (c) (4) None of the panels 15. In which of the panels is the effect of rent control felt primarily in a reduction in the rental price? (1) Only Panel (a) (2) Only Panel (b) (3) Only Panel (C) (4) Only Panels (a) and (b) 16. Suppose that a tax is placed on books. If the buyer pays the majority of the tax, what can we infer? (1) The supply curve is more inelastic than the demand curve. (2) The demand curve is more inelastic than the supply curve. (3) The demand curve has the same elasticity as the supply curve. (4) The buyer always bears a majority of the tax burden.17. What is an important result of a payroll tax? (1) The employee bears the entire burden. (2) The employer bears the entire burden. (3) It places a wedge between the wage that firms pay and the wage that workers receive. (4) It does not affect equilibrium in labour markets.18. How does imposing a tax affect the equilibrium quantity in a typical industry? (1) The equilibrium quantity decreases. (2) The equilibrium quantity increases. (3) There is no change in the equilibrium quantity. (4) The equilibrium quantity may increase or decrease, depending on the elasticity of the supply and demand curves. 19. In free markets, landlords try to keep their buildings clean and safe because: (1) they have a great concern for social well-being. (2) there is always a surplus of housing. (3) they are forced to do so by law. (4) desirable apartments command higher prices. 20. Which of the following regarding rent subsidies is TRUE? (1) Rent subsidies cause housing shortages. (2) Rent subsidies make housing less affordable. (3) Rent subsidies cause lower prices to suppliers. (4) Rent subsidies require higher taxes