Question 1: In general, what is a price ceiling? Choose one of the followings

a. A price ceiling sets the maximum price at which a good can be legally sold.

b. A price ceiling sets the minimum price at which a good can be legally sold.

c. A price ceiling comes in the form of a minimum wage

d. none of the above

Question 2

In general, what is a price floor? Choose one of the followings

A price floor sets the maximum price at which a good can be legally sold.

A price floor sets the minimum price at which a good can be legally sold.

A price floor comes in the form of a rent control

none of the above

Question 3

In general, the goal of a price ceiling is to

Choose one of the followings

decrease the price

increase the price

enhance efficiency

none of the above

Question 4

Choose one of the followings

In general, the goal of a price floor is to

Group of answer choices

decrease the price

increase the price

enhance efficiency

none of the above

Question 5

Questions 5 to 7refer to the following.

• Instruction: To answer the questions, refer to the attached file labeled "rent ceiling"
• Scenario: Assume that the graph characterizes the market for rental apartments in a certain city. The vertical axis pertains to the monthly rent (measured in '00 dollars) and the horizontal axis pertains to the number of apartments.

Question 5 . What are the equilibrium rent and equilibrium quantity of rental apartments?

Group of answer choices

Rent

[ Choose ]15$50020$250

Quantity

[ Choose ]15$50020$250

Question 62 pts

Suppose that the government places a rent ceiling of $300 a month. Under this scenario:

1. What is quantity demanded for rental apartments?
2. What is quantity supplied of rental apartments?
3. Would there be a surplus or shortage of apartments for rent?
4. How many apartments are in surplus or shortage, if any?

Quantity demanded QD

[ Choose ]102021159We have a surplus of apartmentsWe have a shortage of apartments12

Quantity supplied QS

[ Choose ]102021159We have a surplus of apartmentsWe have a shortage of apartments12

Do we have a surplus or shortage of apartments?

[ Choose ]102021159We have a surplus of apartmentsWe have a shortage of apartments12

How many apartments?

[ Choose ]102021159We have a surplus of apartmentsWe have a shortage of apartments12

Question 7

How many apartments will be rented if the government places a rent ceiling of $700 a month, instead of $300? Explain.

Note: Unlike in the previous rent ceiling of $300, observe that this rent ceiling of $700 is higher than the equilibrium rent. Recall our discussion that when a rent ceiling is placed above the equilibrium, it will not have an effect on the market.

How many?

[ Choose ]A rent ceiling placed above equilibrium is binding20A rent ceiling placed above equilibrium is not binding15

Explain

[ Choose ]A rent ceiling placed above equilibrium is binding20A rent ceiling placed above equilibrium is not binding15

Question 8

Questions 8 to 10 refer to the following.

• Instruction: To answer the questions, refer to the attached PDF file labeled "minimum wage." minimum wage.pdf
• Scenario: Assume that the graph describes the labor market in a certain city. The price axis pertains to the wage rate (in dollars) and the quantity axis pertains to the number of workers.

Question 8. What are the equilibrium wage rate and equilibrium number of workers hired?

Wage rate

[ Choose ]30$10$515

Number of workers

[ Choose ]30$10$515

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Question 92 pts

Suppose that workers lobby for a higher wage rate. The local government obliges and sets a minimum wage rate of $8. Under this scenario:

1. What is quantity demanded for labor?
2. What is quantity supplied of labor?
3. Would there be a surplus or shortage of labor?
4. How many workers are in surplus or shortage, if any?

Group of answer choices

Quantity demanded QD

[ Choose ]61824We have a shortage of labor20255We have a surplus of labor

Quantity supplied QS

[ Choose ]61824We have a shortage of labor20255We have a surplus of labor

Do we have a surplus or shortage of labor?

[ Choose ]61824We have a shortage of labor20255We have a surplus of labor

How many?

[ Choose ]61824We have a shortage of labor20255We have a surplus of labor

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Question 102 pts

How many people will be employed if the government sets the minimum wage at $3 instead of $8? How many people will be unemployed?

Note: Unlike in the previous minimum wage of $8, observe that this minimum wage of $3 is lower than the equilibrium wage. Recall our discussion that a minimum wage placed below equilibrium will not have an effect on the market.

Group of answer choices

How many will be employed?

[ Choose ]20150810

How many will be unemployed?

[ Choose ]20150810