Minimum wage laws:

Question 1 options:

a)

createa shortage of workers because no one would be willing to work for the minimum wage.

b)

createa price floor below which workers cannot be legally paid.

c)

are prime examples of price ceilings.

d)

have no impact on wages because the equilibrium wage is higher than the minimum wage.

Markets tend to produce:

Question 4 options:

a)

too little of a good exhibiting external costs.

b)

the right amount of a good exhibiting external costs.

c)

the right amount of a good exhibiting external benefits.

d)

too little of a good exhibiting external benefits.

Question 5(1 point)

If the price of a good is higher than the equilibrium price:

Question 5 options:

a)

consumer surplus is decreased and deadweight loss is increased.

b)

producer surplus is decreased and deadweight loss is decreased.

c)

producer surplus is decreased and deadweight loss is increased.

d)

consumer surplus is increased and deadweight loss is decreased.

(Figure: Determining Surplus and Loss) In the graph, how much is consumer surplus at a price of $12?

Question 3 options: