Microeconomics: Market Equilibrium and Government Actions
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Questions and Answers

What is the result of a rent ceiling set below the equilibrium rent?

  • Increased housing supply
  • Increased housing demand
  • A housing shortage (correct)
  • No effect on the housing market

    • What happens when a price ceiling is set above the equilibrium price?

  • A surplus of the good is created
  • The market works as if there were no ceiling (correct)
  • The price of the good is fixed at the ceiling
  • A shortage of the good is created

    • What is another name for a price ceiling in a housing market?

  • Price floor
  • Price cap
  • Rent floor
  • Rent ceiling (correct)

    • What is the effect of a rent ceiling on the search activity in the housing market?

    <p>Increased search activity</p> Signup and view all the answers

    At the rent ceiling, what is the relationship between the quantity of housing demanded and the quantity supplied?

    <p>The quantity of housing demanded exceeds the quantity supplied</p> Signup and view all the answers

    What is the consequence of a rent ceiling set below the equilibrium rent, in terms of the black market?

    <p>The black market is created</p> Signup and view all the answers

    What happens to the quantity of labor employed when a minimum wage is set above the equilibrium wage?

    <p>It decreases</p> Signup and view all the answers

    What is the result of a minimum wage being set above the equilibrium wage in a labor market?

    <p>Unemployment and a deadweight loss</p> Signup and view all the answers

    Why is the equilibrium wage rate of $9 an hour in the illegal region?

    <p>Because it is below the minimum wage rate</p> Signup and view all the answers

    What is the quantity of labor employed when the minimum wage is set at $10 an hour?

    <p>The quantity of labor demanded</p> Signup and view all the answers

    What is the willingness of some workers to supply the last hour of labor demanded for?

    <p>$8</p> Signup and view all the answers

    What is the main consequence of a rent ceiling in a housing market?

    <p>A decrease in the quantity of housing supplied to the efficient quantity</p> Signup and view all the answers

    What is the result of a minimum wage set above the equilibrium wage rate?

    <p>A surplus of labor</p> Signup and view all the answers

    What is the effect of a price floor on the producer surplus in a market?

    <p>It decreases the producer surplus</p> Signup and view all the answers

    What is the result of a minimum wage set below the equilibrium wage rate?

    <p>The market works as if there were no minimum wage</p> Signup and view all the answers

    What is the effect of a rent ceiling on the consumer surplus in a housing market?

    <p>It increases the consumer surplus</p> Signup and view all the answers

    What is the result of a minimum wage in a labor market?

    <p>A surplus of labor</p> Signup and view all the answers

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