Minimum wage laws:

Question 1 options:

a)

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

b)

creat a 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.

Question 2(1 point)

Suppose that the price of a good is $650 and equilibrium price is $675. Compared to market equilibrium:

Question 2 options:

a)

producer surplus is decreased and deadweight loss is decreased.

b)

consumer surplus is increased and deadweight loss is decreased.

c)

producer surplus is decreased and deadweight loss is increased.

d)

consumer surplus is decreased and deadweight loss is increased.

Question 3(1 point)

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

Question 3 options:

a)

$160

b)

$80

c)

$240

d)

$40

Question 4(1 point)

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.

Question 6(1 point)

When a scarce good or resource is consumed by the person who does not value it most, economists refer to the situation as:

Question 6 options:

a)

efficiency.

b)

a misallocation of resources.

c)

the allocation of resources.

d)

equity.

Question 7(1 point)

Consumer surplus minus producer surplus equals deadweight loss.

Question 7 options:

a)

True

b)

False

Question 8(1 point)

A good example of a government-imposed price floor is:

Question 8 options:

a)

rent controls.

b)

supply and demand.

c)

minimum wage.

d)

equilibrium.

Question 9(1 point)

Price serves as a rationing device.

Question 9 options:

a)

False

b)

True

Question 10(1 point)

Suppose that a customer's willingness to pay for a product is $79, and the seller's willingness to sell is $64. If the negotiated price is $65:

Question 10 options:

a)

consumer surplus is greater than producer surplus.

b)

producer surplus is negative.

c)

producer surplus is greater than consumer surplus.

d)

consumer surplus is negative.