Question :
16) Which of the following true?
i.A price ceiling set below : 1241597
16) Which of the following is true?
i.A price ceiling set below the equilibrium price decreases search activity.
ii.A minimum wage is an example of a price ceiling.
iii.A price support decreases the quantity consumed.
A) only i
B) only ii
C) only iii
D) i and iii
E) ii and iii
17) Which of the following is true?
i.A price support is inefficient.
ii.A price floor set above the equilibrium price creates a surplus.
iii.A price ceiling set above the equilibrium price creates a black market.
A) only i
B) only ii
C) only iii
D) i and ii
E) ii and iii
18) Which of the following can create a deadweight loss?
i.price supports
ii.price floor
iii.price ceiling
A) i only
B) i and iii
C) ii and iii
D) i, ii and iii
E) i and ii
19) Following a major natural disaster that destroys housing, a rent ceiling ________ be an effective policy to increase the quantity of more affordable housing for displaced residents because it would ________.
A) would not; discourage rebuilding and result in a shortage
B) would not; cause the quantity supplied to exceed the quantity demanded
C) would; cause increased search activity
D) would; create a black market that would result in a lower rent
E) would; encourage a greater quantity supplied
20) If an apartment owner charged ________ than a specified rent for housing, the government ________ impose a rent ceiling.
A) more; can
B) more; cannot
C) less; can
D) less; cannot
E) less; might
21) If a rent ceiling is set ________ the equilibrium price, the effect can result in a housing ________.
A) below; surplus
B) below; shortage
C) above; shortage
D) above; surplus
E) equal to; surplus
22) If a rent ceiling is set below the equilibrium price, thus creating a ________, housing may be allocated by increasing search activity or creating a ________.
A) shortage; black market
B) shortage; free market
C) surplus; black market
D) surplus; open market
E) surplus; free market
23) A rent ceiling controls the rent portion of the cost of housing but not the search cost. So when the search cost is ________ the rent, some people end up paying a ________ opportunity cost for housing than they would if there were no rent ceiling.
A) added to; lower
B) subtracted from; higher
C) subtracted from; lower
D) added to; higher
E) equal to; lower
24) If the quantity of housing demanded ________ the quantity of housing supplied, scarce housing resources are allocated efficiently because the marginal cost of the housing ________ the marginal benefit.
A) is more than; equals
B) is less than; equals
C) equals; is more than
D) equals; is less than
E) equals; equals
25) When a rent ceiling is ________, consumer surplus and producer surplus shrink, a deadweight loss ________, and resources are lost in search activity and evading the rent ceiling law.
A) inefficient; arises
B) inefficient; disappears
C) efficient; arises
D) efficient; disappears
E) nonexistent; arises
26) When a minimum wage is introduced ________ the equilibrium wage rate, the quantity of labor demanded ________ and the quantity of labor supplied ________, thus creating unemployment.
A) above; increases; decreases
B) below; increases; decreases
C) above; decreases; increases
D) above; decreases; decreases
E) below; decreases; decreases
27) When a minimum wage is ________, the firms’ surplus and workers’ surplus shrink, a deadweight loss ________, and resources are lost in job search.
A) inefficient; arises
B) inefficient; disappears
C) efficient; arises
D) efficient; disappears
E) nonexistent; arises
28) Nonunion labor is a substitute for union labor, so when the minimum wage ________, the demand for union labor ________.
A) rises; decreases
B) decreases; increases
C) decreases; decreases
D) rises; increases
E) rises; remains the same
29) Import restriction in advanced economies deny developing economies access to the food market of the advanced economies. The result is ________ price and ________ farm production in the developing economies.
A) lower; larger
B) lower; smaller
C) higher; smaller
D) higher; larger
E) stable; smaller
