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What is the time spent looking for someone with whom to conduct business called?

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Consider the market for housing shown in Figure 6.1.1 with the original demand curve, D0. What is the market equilibrium in an unregulated market for housing?

1,750 rooms rented at $175 a month

1,500 rooms rented at $150 a month (correct)

1,750 rooms rented at $200 a month

1,500 rooms rented at $200 a month

2,000 rooms rented at $150 a month

If the demand for rental housing increases and shifts from D0 to D1 in Figure 6.1.1. While the market remains unregulated. What is the new quantity and price equilibrium?

2,000 rooms rented at $200 a month

1,750 rooms rented at $175 a month (correct)

1,750 rooms rented at $200 a month

1,500 rooms rented at $200 a month

2,000 rooms rented at its initial price level

If the demand for rental housing increases from D0 to D1 in Figure 6.1.1, and a strictly enforced rent ceiling of $150 is imposed, what impact does this have on the housing market?

Both B and C Signup and view all the answers

Suppose the demand is D1 in Figure 6.1.1 and a rent ceiling of $150 is imposed. What is the highest rent that would be charged in a black market for housing?

$200 a month Signup and view all the answers

Suppose that there is a rent ceiling imposed at $150 per room in the market for rental housing, as illustrated in Figure 6.1.1, with a demand curve of D1. What is the highest expenditure likely to be incurred in search activity?

$50 Signup and view all the answers

What is an illegal market where the equilibrium price surpasses the established price ceiling referred to as?

A black market Signup and view all the answers

If the government imposes a maximum rent for housing, which is higher than the market equilibrium price, how would this law impact the market?

The law will have no effect on the market for housing. Signup and view all the answers

If a price ceiling is set below the market equilibrium price, what is the impact on the quantity demanded and the quantity supplied?

The quantity demanded exceeds the quantity supplied. Signup and view all the answers

In Figure 6.1.2, if a price ceiling is strictly enforced at $10. What quantity will be sold and at what price?

100 units sold at a price of $10 each Signup and view all the answers

In Figure 6.1.2, what is the maximum price that could be charged in a black market if a price ceiling is set at $10?

$20 Signup and view all the answers

Which of the following outcomes is LEAST likely to occur due to the implementation of a rent ceiling?

A black market price below the rent ceiling Signup and view all the answers

If a rent ceiling set by the government is greater than the market equilibrium rent for housing, what will be the most likely outcome?

The equilibrium rent will prevail as long as all else remains constant. Signup and view all the answers

What is likely to be the outcome of a rent ceiling set below the market equilibrium rent?

Both A and B are correct. Signup and view all the answers

What is the result of a price ceiling set below the market equilibrium price?

Excess demand Signup and view all the answers

Daisy and Donald are both looking for apartments in a community with rent ceilings. Daisy earns $10 per hour, while Donald earns $8 per hour. Assuming both value an apartment equally, what is the most likely outcome?

Donald will spend more time searching for an apartment than Daisy Signup and view all the answers

In an unregulated housing market, who determines the rent?

Market Signup and view all the answers

What is the impact of an effective rent ceiling?

Creates a deadweight loss Signup and view all the answers

In an unregulated housing market, what is the allocation of scarce housing resources like?

Scarce housing resources are allocated efficiently Signup and view all the answers

In an unregulated housing market with no rent ceiling, how do the marginal social cost and marginal social benefit compare?

Marginal social benefit equals marginal social cost Signup and view all the answers

According to the fair result view, what is a just outcome in the housing market?

Allocates scarce housing resources to the poorest Signup and view all the answers

According to the fair rules view, what is a fair outcome in the housing market?

Does not block voluntary exchanges of housing Signup and view all the answers

When rents are not allowed to allocate scarce housing resources. What alternative mechanisms can be used?

A, B and C are correct Signup and view all the answers

A lottery allocates scarce housing to whom?

Those who are lucky Signup and view all the answers

How does the first-come, first-served method allocate scarce housing?

Those whose names are on waiting lists Signup and view all the answers

What is the basis of discrimination in the allocation of scarce housing resources?

Based on the self-interest of landlords Signup and view all the answers

If the government imposes a ceiling on fees that lawyers are permitted to charge, how would this affect the market's efficiency?

Efficient when the ceiling is above the equilibrium fee Signup and view all the answers

Refer to Figure 6.2.1. What is the equilibrium wage rate per hour in an unregulated labor market?

$4 Signup and view all the answers

Refer to Figure 6.2.1. Suppose a $5 per hour minimum wage is in effect. What is the lowest wage per hour an unemployed worker would be willing to accept?

$3 Signup and view all the answers

If the minimum wage is set at $2 per hour in Figure 6.2.1, what is the level of unemployment in millions of hours?

0 Signup and view all the answers

If the minimum wage is set at $4 per hour, leading to 10 million hours of unemployment, and the demand for labor increases to where labor supply and demand intersect at $5 per hour, what will be the new equilibrium wage rate and level of unemployment?

The wage rate will be $5 per hour, and there will be no unemployment Signup and view all the answers

Refer to Table 6.2.1. In an unregulated labor market, what is the wage rate and level of unemployment for teenage labor in Genoa City given the supply and demand schedules provided?

There is no teenage unemployment, and the wage rate is $5 per hour. Signup and view all the answers

Refer to Table 6.2.1. If the Genoa City Council imposes a minimum wage of $6 per hour for teenage labor, what is the level of unemployment in hours?

400 hours Signup and view all the answers

Referring to Table 6.2.1, suppose a new fast-food restaurant opens and increases the quantity demanded of teenage labor by 400 hours per week at every wage rate. If a minimum wage of $6 per hour is in place, what will be the outcome?

The elimination of teenage unemployment, but the wage rate will remain at $6 per hour Signup and view all the answers

Table 6.2.1 shows the supply and demand schedules for teenage labor in Genoa City. Suppose a new fast-food restaurant opens, increasing demand for teenage labor by 400 hours per week at each wage rate, and the teenage labor market operates without regulation. What is the new level of teenage employment?

800 hours per week and a wage of $6 per hour Signup and view all the answers

Which one of the following statements is false?

A minimum wage is a price ceiling in the labor market Signup and view all the answers

Refer to Table 6.2.2. What level of unemployment in millions of hours is there when the minimum wage is set at $3 per hour?

Zero Signup and view all the answers

Refer to Table 6.2.2. What is the equilibrium wage rate in an unregulated market?

$5.50 Signup and view all the answers

Suppose the minimum wage is $4 per hour and 1,100 units of labor are hired. Then the government raises the minimum wage to $6 per hour, and 900 units of labor are hired. Select the statement below that is TRUE.

All of the above statements except A are true Signup and view all the answers

Complete the following sentence: A price floor set below the equilibrium price results in:

The equilibrium price Signup and view all the answers

What happens to the quantity of labor supplied, quantity of labor demanded, unemployment, and job search activity when a minimum wage is set above the equilibrium wage rate?

Unemployment increases Signup and view all the answers

Suppose the demand for gasoline is inelastic but not perfectly inelastic, and the supply is elastic but not perfectly elastic. Who bears the burden of a tax imposed on gasoline?

Mostly by buyers Signup and view all the answers

Suppose the demand for CDs is elastic, but not perfectly elastic, and the supply of CDs is inelastic, but not perfectly inelastic. Who bears the burden of a tax imposed on CDs?

Mostly by sellers Signup and view all the answers

Refer to figure 6.3.1, which illustrates the market for frisbees before and after a tax is imposed. What is the tax on each frisbee?

$1.00 Signup and view all the answers

Refer to Figure 6.3.1, which illustrates the market for frisbees before and after a tax is imposed. What is the sellers' share of the tax on each frisbee?

$0.40 Signup and view all the answers

Refer to Figure 6.3.1, which illustrates the market for frisbees before and after a tax is imposed. What is the government's revenue from the tax?

$4,000 Signup and view all the answers

In Figure 6.3.1, within the range of 4,000 to 5,000 frisbees, is demand elastic, unit elastic, or inelastic?

Elastic Signup and view all the answers

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Questions and Answers

What is the time spent looking for someone with whom to conduct business called?

Consider the market for housing shown in Figure 6.1.1 with the original demand curve, D0. What is the market equilibrium in an unregulated market for housing?

If the demand for rental housing increases and shifts from D0 to D1 in Figure 6.1.1. While the market remains unregulated. What is the new quantity and price equilibrium?

If the demand for rental housing increases from D0 to D1 in Figure 6.1.1, and a strictly enforced rent ceiling of $150 is imposed, what impact does this have on the housing market?

Suppose the demand is D1 in Figure 6.1.1 and a rent ceiling of $150 is imposed. What is the highest rent that would be charged in a black market for housing?

Suppose that there is a rent ceiling imposed at $150 per room in the market for rental housing, as illustrated in Figure 6.1.1, with a demand curve of D1. What is the highest expenditure likely to be incurred in search activity?

What is an illegal market where the equilibrium price surpasses the established price ceiling referred to as?

If the government imposes a maximum rent for housing, which is higher than the market equilibrium price, how would this law impact the market?

If a price ceiling is set below the market equilibrium price, what is the impact on the quantity demanded and the quantity supplied?

In Figure 6.1.2, if a price ceiling is strictly enforced at $10. What quantity will be sold and at what price?

In Figure 6.1.2, what is the maximum price that could be charged in a black market if a price ceiling is set at $10?

Which of the following outcomes is LEAST likely to occur due to the implementation of a rent ceiling?

If a rent ceiling set by the government is greater than the market equilibrium rent for housing, what will be the most likely outcome?

What is likely to be the outcome of a rent ceiling set below the market equilibrium rent?

What is the result of a price ceiling set below the market equilibrium price?

Daisy and Donald are both looking for apartments in a community with rent ceilings. Daisy earns $10 per hour, while Donald earns $8 per hour. Assuming both value an apartment equally, what is the most likely outcome?

In an unregulated housing market, who determines the rent?

What is the impact of an effective rent ceiling?

In an unregulated housing market, what is the allocation of scarce housing resources like?

In an unregulated housing market with no rent ceiling, how do the marginal social cost and marginal social benefit compare?

According to the fair result view, what is a just outcome in the housing market?

According to the fair rules view, what is a fair outcome in the housing market?

When rents are not allowed to allocate scarce housing resources. What alternative mechanisms can be used?

A lottery allocates scarce housing to whom?

How does the first-come, first-served method allocate scarce housing?

What is the basis of discrimination in the allocation of scarce housing resources?

If the government imposes a ceiling on fees that lawyers are permitted to charge, how would this affect the market's efficiency?

Refer to Figure 6.2.1. What is the equilibrium wage rate per hour in an unregulated labor market?

Refer to Figure 6.2.1. Suppose a $5 per hour minimum wage is in effect. What is the lowest wage per hour an unemployed worker would be willing to accept?

If the minimum wage is set at $2 per hour in Figure 6.2.1, what is the level of unemployment in millions of hours?

If the minimum wage is set at $4 per hour, leading to 10 million hours of unemployment, and the demand for labor increases to where labor supply and demand intersect at $5 per hour, what will be the new equilibrium wage rate and level of unemployment?

Refer to Table 6.2.1. In an unregulated labor market, what is the wage rate and level of unemployment for teenage labor in Genoa City given the supply and demand schedules provided?

Refer to Table 6.2.1. If the Genoa City Council imposes a minimum wage of $6 per hour for teenage labor, what is the level of unemployment in hours?

Referring to Table 6.2.1, suppose a new fast-food restaurant opens and increases the quantity demanded of teenage labor by 400 hours per week at every wage rate. If a minimum wage of $6 per hour is in place, what will be the outcome?

Which one of the following statements is false?

Refer to Table 6.2.2. What level of unemployment in millions of hours is there when the minimum wage is set at $3 per hour?

Refer to Table 6.2.2. What is the equilibrium wage rate in an unregulated market?

Suppose the minimum wage is $4 per hour and 1,100 units of labor are hired. Then the government raises the minimum wage to $6 per hour, and 900 units of labor are hired. Select the statement below that is TRUE.

Complete the following sentence: A price floor set below the equilibrium price results in:

What happens to the quantity of labor supplied, quantity of labor demanded, unemployment, and job search activity when a minimum wage is set above the equilibrium wage rate?

Suppose the demand for gasoline is inelastic but not perfectly inelastic, and the supply is elastic but not perfectly elastic. Who bears the burden of a tax imposed on gasoline?

Suppose the demand for CDs is elastic, but not perfectly elastic, and the supply of CDs is inelastic, but not perfectly inelastic. Who bears the burden of a tax imposed on CDs?

Refer to figure 6.3.1, which illustrates the market for frisbees before and after a tax is imposed. What is the tax on each frisbee?

Refer to Figure 6.3.1, which illustrates the market for frisbees before and after a tax is imposed. What is the sellers' share of the tax on each frisbee?

Refer to Figure 6.3.1, which illustrates the market for frisbees before and after a tax is imposed. What is the government's revenue from the tax?

In Figure 6.3.1, within the range of 4,000 to 5,000 frisbees, is demand elastic, unit elastic, or inelastic?

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