Question : 31) If the equilibrium wage in a competitive labour market : 1384171

 

31) If the equilibrium wage in a competitive labour market is $9 per hour, and the government raises the minimum wage from $7 to $8 per hour, what will be the effect in this market?

A) the level of employment will decrease

B) unemployment will increase

C) unemployment will decrease

D) there will be no effect on employment

E) the average wage paid to workers will increase

32) For a legislated minimum wage to be binding in a competitive labour market, it must be set

A) below the free-market wage.

B) equal to the free-market wage.

C) above the free-market wage.

D) at or below the free-market wage.

E) such that no worker can earn more than the established minimum wage.

33) A legal price ceiling, if it is binding, is a

A) minimum price, below equilibrium, which price is not allowed to fall below.

B) maximum price, above equilibrium, which price is not allowed to exceed.

C) minimum price, above equilibrium, which price is not allowed to fall below.

D) maximum price, below equilibrium, which a price is not allowed to exceed.

E) any maximum price which price is not allowed to exceed.

34) A price ceiling set below the free-market equilibrium price will result in

A) a clearing of the market.

B) greater quantity exchanged.

C) surpluses.

D) excess demand.

E) excess supply.

35) Suppose the free-market equilibrium price for ice time at privately operated hockey arenas is $250 per hour.  If the municipal government imposes a price ceiling of $130 per hour, we can expect to see

A) an adjustment of the free-market equilibrium price to $100.

B) an excess supply of ice time.

C) a black market price below the free-market equilibrium price.

D) that neither excess supply nor excess demand is created.

E) an excess demand for ice time.

36) In a competitive market, a legal price ceiling set above the free-market equilibrium price will result in

A) a continuation of the free-market equilibrium price and quantity.

B) the quantity demanded exceeding quantity supplied and thus a shortage in the market.

C) the quantity supplied exceeding quantity demanded and thus a surplus in the market.

D) a new free-market equilibrium at a higher price and lower output level.

E) increased profits to the firms in the industry.

37) In a competitive market, a price ceiling set below the free-market equilibrium price will result in

A) a continuation of the free-market equilibrium price and quantity.

B) the quantity demanded exceeding quantity supplied and thus a shortage in the market.

C) the quantity supplied exceeding quantity demanded and thus a surplus in the market.

D) a new free-market equilibrium at a lower price and higher output level.

E) excess supply.

38) Which of the following statements best differentiates price ceilings and price floors?

A) Price ceilings represent minimum prices, while price floors represent maximum prices.

B) Binding price ceilings are always set below the equilibrium price, whereas binding price floors are always set above the equilibrium price.

C) Price ceilings are always effective, whereas price floors are rarely effective.

D) Price floors cause shortages to appear, whereas price ceilings have the opposite effect.

E) Price ceilings and price floors have the same effects.

39) Suppose that the free-market equilibrium price of natural gas would be $2.00 per unit, but in an effort to protect consumers the government has fixed the price at $1.50. At this ceiling price the quantity ________ will be greater than the quantity ________, resulting in a ________ of natural gas.

A) demanded; supplied; surplus

B) supplied; demanded; surplus

C) demanded; supplied; shortage

D) supplied; demanded; shortage

E) demanded; supplied; reduction in equilibrium price

40) If the free-market equilibrium price for some product is $25, then a legal price ceiling set at $15 will bring about

A) the same general effects as a price ceiling of $25.

B) the same general effects as an equilibrium price of $15.

C) no change in the market outcomes.

D) a surplus of the good.

E) a shortage of the good.

 

 

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