• 1
  • A price ceiling _____________________________.

    makes it illegal to charge a higher price than specified
    is necessary to maintain market equilibrium
    occurs in housing markets only
    is more effective when it is higher

  • 2
  • A rent ceiling _______________________________.

    set above equilibrium price is effective
    always increases the quantity of rental units supplied
    set below equilibrium price is effective
    does not change the market price

  • 3
  • A rent ceiling that is effective results in _______________________.

    an increase in the supply of housing
    a shortage of housing
    helping the poor
    more housing supplied than demanded

  • 4
  • Search activity _____________________________.

    decreases when a price ceiling is set on a good
    increases when a price ceiling is set on a good
    is unnecessary when a black market exists
    occurs there is a surplus of the good

  • 5
  • The government sets a price floor for corn which is effective. All of the following, except _______________, will occur.

    A surplus of corn will be produced.
    The corn market is efficient.
    Tthe government will buy the corn surplus.
    A deadweight loss is created.

  • 6
  • When a minimum wage is set above the equilibrium wage rate, ______________________.

    unemployment decreases
    unemployment increases
    search activity decreases
    the supply of low-skilled workers decreases

  • 7
  • A minimum wage law ____________________.

    creates more employment opportunities for low-skilled workers
    creates unemployment among low-skilled workers
    creates more prosperity among younger people
    increases the number of good paying jobs available to young people

  • 8
  • Buyers respond only to the price that _______ the tax, and sellers respond to the price that _______ the tax.

    includes; includes
    excludes; excludes
    excludes; includes
    includes; excludes

  • 9
  • If the demand for an agricultural good is inelastic, then a bumper harvest results in a lower price and farm revenue will _________________.

    either remain constant or increase
    remain constant

  • 10
  • A government price stabilization agency _______ inventory when the price is above the future expected price and _______ inventory when the price is below the future expected price.

    sells from; buys for
    buys for; sells from
    sells from; sells from
    buys for; buys for

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