• 1
  • A forest fire destroys a large housing area. Immediately after the fire, the price of housing _______. But after some time, the ______________ starts to increase and the price starts to ______________.

    increases; demand; rise further
    decreases; supply; rise further
    increases; supply; fall
    decreases; demand; rise

  • 2
  • The figure shows the market for rental units in Gladstone. The market is in equilibrium. The government now introduces a rent ceiling of $500 a month. The price of a rental unit ________ and the number of units rented _______.


    decreases by $100 per month; decreases
    remains the same; remains the same
    increases by $500 per month; decreases
    increases by $100 per month; increases

  • 3
  • When an effective minimum wage is introduced, the number of hours of labor employed is determined by the ___________ and the __________.

    demand for labor; minimum wage
    supply of and demand for labor; the minimum wage
    demand for labor; supply of labor
    supply of labor; minimum wage

  • 4
  • The table gives the demand and supply schedules for cookies. The government now levies a $0.30 tax on cookies. As a result, the price of a packet of cookies increases by __________ and the tax revenue collected is ____________a week.


    $0.20; $24
    $0.20; $20
    $0.10; $9
    $0.30; $30

  • 5
  • The more ______________, the larger is the amount of the tax on the good that the ___________ pays.

    elastic the demand for a good; seller
    elastic the demand for a good; buyer
    elastic the supply of a good; seller
    inelastic the demand for a good; seller

  • 6
  • The figure illustrates the market for posters. The tax on a poster is __________ and the government's tax revenue from the sale of posters is _______________a month.


    $0.50; $150
    $0.35; $200
    $0.35; $140
    $0.35; $105

  • 7
  • If the government increases the tax on CD players, _____________________.

    the deadweight loss increases
    the number of CDs purchased increases
    the market becomes more efficient
    the consumer surplus increases

  • 8
  • If the penalty on sellers of an illegal good is greater than the penalty on buyers of an illegal good, then supply of the good will _______ by more than demand and the price of the good will _______.

    decrease; increase
    decrease; remain the same
    increase; increase
    decrease; decrease

  • 9
  • Because most agricultural products have an _______ demand, a poor harvest in an unregulated market will _______ farm revenue.

    inelastic; increase
    elastic; increase
    elastic; decrease
    inelastic; decrease

  • 10
  • During years of bumper harvests, inventory holders will _______ their inventories and farm revenue will __________.

    increase; increase
    decrease; decrease
    decrease; increase
    increase; decrease

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