Question : 22) An illegal market in which the price exceeds a : 1241607

22) An illegal market in which the price exceeds a legally imposed price ceiling is called a

A) shortage market.

B) surplus market.

C) black market.

D) fair market.

E) subsidized market.

23) A black market

A) is legal only when it is associated with government price ceilings.

B) is defined as the deadweight loss associated with taxes.

C) benefits no one.

D) is a potential outcome of a price ceiling.

E) is always legal.

24) A price ceiling

A) creates market efficiency by making a good cheaper.

B) helps all producers by increasing the price of the good.

C) can create a black market for the good.

D) reduces search activity.

E) benefits all people who want to buy the good.

25) A rent ceiling below the equilibrium rent

A) increases the quantity of housing supplied.

B) is an example of a price floor.

C) has no effect on the housing market because the ceiling is below the equilibrium.

D) can create a black market.

E) limits search because people need no longer search for cheap apartments.

26) A black market for housing exists because of a rent ceiling. The rent for housing in the black market is

A) the same as the equilibrium rent.

B) lower than the ceiling rent.

C) somewhere between the ceiling rent and the maximum rent a tenant is willing to pay.

D) somewhere between zero and the equilibrium rent.

E) not defined because the market is not legal.

27) Black markets can occur when price ceilings are imposed in a market. Which of the following explains why sellers participate in a black market?

A) Sellers are able to sell the product for a higher than legal price.

B) There are more buyers in the black market than in the legal market.

C) The demand is perfectly elastic in a black market.

D) The demand is perfectly inelastic in a black market.

E) The surplus in the legal market means that many sellers can sell their product in the black market.

28) When a rent ceiling law is passed in a city, which of the following occurs?

A) The total price of renting an apartment decreases to all renters.

B) The quantity of apartments supplied does not change.

C) Some landlords and renters use methods such as “key money” to get around the rent ceiling law.

D) Renters have no trouble finding a nice, reasonably priced apartment to rent.

E) Generally the number of renters in the city increases because people move to the city to take advantage of the low-rent apartments.

29) One of the consequences of a rent ceiling set below the equilibrium rent is

A) decreased search activity.

B) increased search activity.

C) the establishment of landlord unions.

D) surpluses of apartments.

E) the elimination of the deadweight loss that would otherwise exist in the housing market.

30) The opportunity cost of an apartment in a rent controlled market is equal to

A) the rent charged for the apartment.

B) the opportunity cost of searching for the apartment.

C) the rent charged for the apartment plus the opportunity cost of searching for the apartment.

D) nothing because of the surplus of apartments when there are rent controls.

E) the rent charged for the apartment minus the opportunity cost of searching for the apartment.

31) A rent ceiling in a housing market

A) makes all rents lower than the ceiling illegal to charge.

B) is set above the equilibrium rent in order to have an effect.

C) increases the time people spend searching for housing.

D) Both answers B and C are correct.

E) Both answers A and C are correct.