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