17 Questions
What is the result of a rent ceiling set below the equilibrium rent?
A housing shortage
What happens when a price ceiling is set above the equilibrium price?
The market works as if there were no ceiling
What is another name for a price ceiling in a housing market?
Rent ceiling
What is the effect of a rent ceiling on the search activity in the housing market?
Increased search activity
At the rent ceiling, what is the relationship between the quantity of housing demanded and the quantity supplied?
The quantity of housing demanded exceeds the quantity supplied
What is the consequence of a rent ceiling set below the equilibrium rent, in terms of the black market?
The black market is created
What happens to the quantity of labor employed when a minimum wage is set above the equilibrium wage?
It decreases
What is the result of a minimum wage being set above the equilibrium wage in a labor market?
Unemployment and a deadweight loss
Why is the equilibrium wage rate of $9 an hour in the illegal region?
Because it is below the minimum wage rate
What is the quantity of labor employed when the minimum wage is set at $10 an hour?
The quantity of labor demanded
What is the willingness of some workers to supply the last hour of labor demanded for?
$8
What is the main consequence of a rent ceiling in a housing market?
A decrease in the quantity of housing supplied to the efficient quantity
What is the result of a minimum wage set above the equilibrium wage rate?
A surplus of labor
What is the effect of a price floor on the producer surplus in a market?
It decreases the producer surplus
What is the result of a minimum wage set below the equilibrium wage rate?
The market works as if there were no minimum wage
What is the effect of a rent ceiling on the consumer surplus in a housing market?
It increases the consumer surplus
What is the result of a minimum wage in a labor market?
A surplus of labor
Test your understanding of market equilibrium, efficiency, and government interventions in the economy. This quiz covers topics such as price ceilings, price floors, and market failure.
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