Question 1

Suppose the equilibrium price of a gallon of milk is $4.If the government imposes a price floor of $5 per gallon of milk,

Accepted Answer

A price floor set above the equilibrium price ($5 instead of $4) leads to a surplus, where the quantity supplied exceeds the quantity demanded because producers are willing to supply more at the higher price, but consumers are not willing to buy as much.

Question 2

-The figure above shows the labor market in a region.If a minimum wage of $8 an hour is imposed,then the quantity of labor supplied is ________ and the quantity of labor demanded is ________.

Accepted Answer

When a minimum wage of $8 an hour is imposed, it is above the equilibrium wage, leading to a surplus of labor. The quantity of labor supplied increases as more workers are willing to work at the higher wage, while the quantity of labor demanded decreases because employers are less willing to hire at the higher wage. Therefore, the quantity of labor supplied is 80,000, and the quantity of labor demanded is 40,000.

Question 3

$$\begin{array} { c c c } 
\begin{array} { c } 
\text { Wage rate } \
\text { (dollars per hour) }
\end{array} & \begin{array} { c } 
\text { Quantity demanded } \
\text { (workers) }
\end{array} & \begin{array} { c } 
\text { Quantity supplied } \
\text { (workers) }
\end{array} \
\hline 12 & 400 & 1000 \
11 & 600 & 900 \
10 & 800 & 800 \
9 & 1000 & 700 \
8 & 1200 & 500
\end{array}$$
-The labor demand and labor supply schedules are given in the table above.If a minimum wage of $11 per hour is imposed,

Accepted Answer

The answer of \[\begin{array} { c c c } 
\begin{array}...

Question 4

-The figure above shows the labor market in a region.In which of the following cases would the amount of unemployment be the largest?

Accepted Answer

Imposing a minimum wage of $8 an hour would create the largest gap between the quantity of labor supplied and the quantity of labor demanded, leading to the highest amount of unemployment.

Question 5

One result of the minimum wage is

Accepted Answer

When the minimum wage is set higher than the market equilibrium wage, it creates a surplus of labor, leading to higher unemployment and a decrease in demand for labor. As a result, employers may seek to hire workers illegally at lower wages, leading to a black market for labor that pays less than the minimum wage.

Question 6

Suppose the equilibrium price of a gallon of milk is $4.If the government imposes a price floor of $5 per gallon of milk,the

Accepted Answer

A price floor set above the equilibrium price ($5 instead of $4) causes the quantity supplied to exceed the quantity demanded, leading to a surplus of milk.

Question 7

Suppose the equilibrium wage rate for apricot pickers is $7.00 per hour and at that wage rate the equilibrium quantity of apricot pickers employed is 14,000.If the minimum wage is set at $7.50 per hour,then the

Accepted Answer

If the minimum wage is set at $7.50 per hour, which is higher than the equilibrium wage rate of $7.00 per hour, employers will likely reduce the quantity of apricot pickers they employ in order to offset the higher cost of labor. As a result, the quantity of apricot pickers employed decreases.

Question 8

One result of a minimum wage is

Accepted Answer

The answer of One result of a minimum wage is
...

Question 9

$$\begin{array} { c c c } 
\begin{array} { c } 
\text { Wage rate } \
\text { (dollars per hour) }
\end{array} & \begin{array} { c } 
\text { Quantity demanded } \
\text { (workers) }
\end{array} & \begin{array} { c } 
\text { Quantity supplied } \
\text { (workers) }
\end{array} \
\hline 12 & 400 & 1000 \
11 & 600 & 900 \
10 & 800 & 800 \
9 & 1000 & 700 \
8 & 1200 & 500
\end{array}$$
-The labor demand and labor supply schedules are given in the table above.If a minimum wage of $9 per hour is imposed,

Accepted Answer

The answer of \[\begin{array} { c c c } 
\begin{array}...

Question 10

Suppose the current equilibrium wage rate for housekeepers is $8.60 per hour.An increase in the minimum wage to $7.50 per hour leads to

Accepted Answer

Since the new minimum wage ($7.50) is below the current equilibrium wage ($8.60), it will not affect the equilibrium condition. Employers are already paying more than the new minimum wage, so there's no reason for the quantity supplied or demanded to change.

Question 11

In a competitive labor market,a minimum wage law set above the equilibrium wage rate

Accepted Answer

When a minimum wage law is set above the equilibrium wage rate, it creates a surplus of labor because there will be more people willing to work at the higher wage rate than there are available jobs. This can lead to unemployment and potentially lower wages for those who are still employed.

Question 12

Suppose the current equilibrium wage rate for landscapers is $6.65 in Little Rock; $7.50 in St.Louis and $9.05 in Raleigh.An increase in the minimum wage to $7.50 per hour results in unemployment of landscapers in

Accepted Answer

An increase in the minimum wage to $7.50 per hour would only result in unemployment of landscapers in Little Rock, where the current equilibrium wage rate is below $7.50. In St. Louis and Raleigh, the equilibrium wage rates are already at or above $7.50, so the increase in the minimum wage would not directly cause unemployment in those cities.

Question 13

A stated goal of a minimum wage is to

Accepted Answer

The stated goal of a minimum wage is to boost the incomes of low-wage earners. It is intended to provide a floor for wages, ensuring that workers receive a fair wage and can provide for themselves and their families. The other options either do not align with the intended goal of the minimum wage or are unintended consequences.

Question 14

Why do some workers lose their job when the minimum wage is increased?

Accepted Answer

When the minimum wage is increased, employers may find it more expensive to hire workers and may therefore decrease the quantity of labor demanded, leading to some workers losing their jobs. This is known as the employment effect of a minimum wage increase.

Question 15

-The figure above shows the labor market in a region.For a minimum wage to change the wage rate and amount of employment,it must be

Accepted Answer

For a minimum wage to impact the wage rate and employment levels, it must be set above the equilibrium wage rate, which is $6 per hour in this scenario. Setting it at or below $6 would not change the current market conditions.

Question 16

A minimum wage increases unemployment by

Accepted Answer

When the minimum wage increases, employers must pay their workers more, and as a result, they may need to reduce the number of workers they employ to offset the increase in labor costs. This leads to a decrease in the quantity of labor demanded.

Question 17

In the labor market,as wages rise,households

Accepted Answer

The answer of In the labor market,as wages rise,households
...

Question 18

Suppose the equilibrium wage rate for apricot pickers is $9.00 per hour in California and at that wage rate the equilibrium quantity of apricot pickers is 14,000.If the minimum wage is set at $7.50 per hour,then the

Accepted Answer

Since the minimum wage is below the equilibrium wage rate, there will be no effect on the quantity of apricot pickers employed, and hence, no effect on the equilibrium quantity of 14,000. Therefore, the quantity of apricot pickers employed does not change.

Question 19

A price floor

Accepted Answer

A price floor set above the equilibrium price changes the price and quantity by creating a surplus, as the minimum price is higher than what the market is willing to pay, leading to less quantity being sold at a higher price.

Question 20

-The figure above shows the labor market in a region.If a minimum wage of $8 an hour is imposed,then there are ________ unemployed workers.

Accepted Answer

With a minimum wage of $8 an hour, the quantity of labor supplied exceeds the quantity of labor demanded, creating a surplus of workers. The difference between workers willing to work (160,000) and the jobs available (120,000) at this wage rate is 40,000, indicating 40,000 unemployed workers.

Quiz 7: Government Actions in Markets