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Exam 6: Government Actions in Markets

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Question 31

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Daisy and Donald live in a community with rent ceilings.Both are looking for an apartment to rent.Daisy has a job paying $10 per hour and Donald has a job paying $8 per hour.Both value an apartment equally.What is the most likely outcome?

A) Daisy will spend more time than Donald searching for an apartment.
B) Donald will spend more time than Daisy searching for an apartment.
C) Both of them will spend the same amount of time searching for an apartment.
D) Daisy will find the apartment.
E) Donald will find the apartment.

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Question 32

Multiple Choice

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In an unregulated housing market with no rent ceiling,

A) scarce housing resources are allocated inefficiently.
B) scarce housing resources are allocated efficiently.
C) tenants pay a lower rent compared to what they pay in a market with an effective rent ceiling.
D) landlords receive less compared to what they receive in a market with an effective rent ceiling.
E) consumer surplus equals producer surplus.

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Question 33

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Use the table below to answer the following questions. Table 6.3.1 -Refer to Table 6.3.1.Suppose a sales tax of $2 a unit is imposed on the good described in the table.The buyers' share of the tax is

Discrimination allocates scarce housing

An effective minimum wage ________ the firms' surplus and ________ the workers' surplus.

Use the table below to answer the following questions. Table 6.2.1 -Table 6.2.1 gives the supply and demand schedules for teenage labour in Genoa City.There is a minimum wage set at $16 per hour.Suppose a new fast food restaurant opens and increases the quantity demanded of teenage labour by 400 hours per week at each wage rate.The result is

If the penalty on sellers of an illegal good is less than the penalty on buyers of an illegal good,then supply of the good will ________ by ________ demand and the price of the good will ________.

If the demand for a good is perfectly elastic,then a tax on the good will be paid

A lottery allocates housing to those

Use the figure below to answer the following questions. Figure 6.3.3 -Refer to Figure 6.3.3.Suppose a tax of $1 is imposed.In which market would tax revenue be the highest?

Which one of the following statements is false?

A price ceiling set below the equilibrium price will result in

Use the figure below to answer the following questions. Figure 6.2.1 -Refer to Figure 6.2.1.What is the equilibrium wage rate per hour in an unregulated market?

The buyer pays most of a tax if supply is relatively elastic because

Use the figure below to answer the following questions. Figure 6.3.3 -Refer to Figure 6.3.3.Suppose a tax of $1 is imposed.In which market would tax revenue be the lowest?

If the supply of a good is perfectly elastic,then a tax on the good will be paid

If the price of a good is not affected by a tax,then

An illegal market in which the equilibrium price exceeds the price ceiling is

In an unregulated housing market with no rent ceiling,

Use the table below to answer the following questions. Table 6.2.2 -Table 6.2.2 gives the labour demand and labour supply schedules for low-skilled labour.What is the level of unemployment in millions of hours if the minimum wage is set at $17 per hour?