Question 1

$$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Hourly Wage } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Labor } \
\text { Supplied }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Labor } \
\text { Demanded }
\end{array} \
\hline \$ 8.00 & 350,000 & 390,000 \
\hline 8.50 & 360,000 & 380,000 \
\hline 9.00 & 370,000 & 370,000 \
\hline 9.50 & 380,000 & 360,000 \
\hline 10.00 & 390,000 & 350,000 \
\hline 10.50 & 400,000 & 340,000 \
\hline
\end{array}$$ Table 4-8 shows the demand and supply schedules for the low-skilled labor market in the city of Westover.
-Refer to Table 4-8.What is the equilibrium hourly wage (W*)and the equilibrium quantity of labor (Q*)?

Accepted Answer

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

Question 2

$$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Hourly Wage } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Labor } \
\text { Supplied }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Labor } \
\text { Demanded }
\end{array} \
\hline \$ 8.00 & 350,000 & 390,000 \
\hline 8.50 & 360,000 & 380,000 \
\hline 9.00 & 370,000 & 370,000 \
\hline 9.50 & 380,000 & 360,000 \
\hline 10.00 & 390,000 & 350,000 \
\hline 10.50 & 400,000 & 340,000 \
\hline
\end{array}$$ Table 4-8 shows the demand and supply schedules for the low-skilled labor market in the city of Westover.
-Refer to Table 4-8.If a minimum wage of $10.00 an hour is mandated,what is the quantity of labor supplied?

Accepted Answer

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

Question 3

In the economic sense,almost everything is scarce.________ of a good or service occurs when the quantity demanded is greater than the quantity supplied at the current market price.

Accepted Answer

A shortage occurs when there is not enough supply of a good or service to meet the demand at the current market price. This is a temporary situation that can lead to price increases or rationing of the good or service.

Question 4

Suppose a price floor on sparkling wine is proposed by the Health Minister of the country of Vinyardia.What will be the likely effect on the market for sparkling wine in Vinyardia?

Accepted Answer

The answer of Suppose a price floor on sparkling wine...

Question 5

By charging the equilibrium price for shared rides as opposed to the government-regulated price charged by traditional taxi companies,Uber has

Accepted Answer

By charging the equilibrium price, Uber has increased consumer surplus. This is because consumers are able to obtain the good (in this case, a ride) at a lower price than what they would have paid under traditional taxi company pricing. This leads to a larger area of consumer surplus on the demand curve.

Question 6

Which of the following is not a result of imposing a rent ceiling?

Accepted Answer

The answer of Which of the following is not a...

Question 7

Which of the following is not a result of government price controls?

Accepted Answer

Price controls can have various impacts on different groups, but it is not accurate to say that they only benefit poor consumers and harm producers and wealthy consumers. This statement oversimplifies the effects of price controls and does not take into account the potential for unintended consequences, such as shortages or black markets. Therefore, B is the answer as this option is not a universal result of government price controls. A, C, and D are all commonly observed outcomes of price controls.

Question 8

$$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Hourly Wage } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Labor } \
\text { Supplied }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Labor } \
\text { Demanded }
\end{array} \
\hline \$ 8.00 & 350,000 & 390,000 \
\hline 8.50 & 360,000 & 380,000 \
\hline 9.00 & 370,000 & 370,000 \
\hline 9.50 & 380,000 & 360,000 \
\hline 10.00 & 390,000 & 350,000 \
\hline 10.50 & 400,000 & 340,000 \
\hline
\end{array}$$ Table 4-8 shows the demand and supply schedules for the low-skilled labor market in the city of Westover.
-Refer to Table 4-8.If a minimum wage of $10.00 an hour is mandated,what is the quantity of labor demanded?

Accepted Answer

At a minimum wage of $10.00 an hour, the quantity of labor demanded is determined by the point where the demand and supply curves intersect. At this point, the quantity of labor demanded is 350,000.

Question 9

Economists are reluctant to state that price controls are desirable or undesirable because

Accepted Answer

Economists are hesitant to make value judgments about whether price controls are desirable or not. The gains and losses resulting from price controls are not solely an economic question as they involve ethical and political considerations as well. Therefore, economists remain neutral on the desirability of price controls.

Question 10

When ________ in a market,the total net benefit to society is maximized.

Accepted Answer

A competitive equilibrium, where supply equals demand, leads to the maximum possible net benefit to society. In this situation, both consumers and producers are able to maximize their individual surpluses, resulting in an overall net benefit to society. Choices A, C, and D all suggest outcomes that would actually decrease overall net benefit to society.

Question 11

$$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Hourly Wage } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Labor } \
\text { Supplied }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Labor } \
\text { Demanded }
\end{array} \
\hline \$ 8.00 & 350,000 & 390,000 \
\hline 8.50 & 360,000 & 380,000 \
\hline 9.00 & 370,000 & 370,000 \
\hline 9.50 & 380,000 & 360,000 \
\hline 10.00 & 390,000 & 350,000 \
\hline 10.50 & 400,000 & 340,000 \
\hline
\end{array}$$ Table 4-8 shows the demand and supply schedules for the low-skilled labor market in the city of Westover.
-Refer to Table 4-8.If a minimum wage of $10.50 an hour is mandated,what is the quantity of labor demanded?

Accepted Answer

At a minimum wage of $10.50, the quantity demanded is where the demand and supply curves intersect. This occurs at a quantity of 340,000, which is represented by the point (10.50, 340,000) on the graph.

Question 12

Congress passed the ________ in 1996,the purpose of which was to phase out price floors and return to a free market in agriculture

Accepted Answer

The Freedom to Farm Act, passed in 1996, aimed to phase out price floors and subsidies for farmers, returning to a free market system in agriculture. This represented a significant departure from previous agricultural policies and was intended to reduce government spending on farm subsidies.

Question 13

$$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Hourly Wage } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Labor } \
\text { Supplied }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Labor } \
\text { Demanded }
\end{array} \
\hline \$ 8.00 & 350,000 & 390,000 \
\hline 8.50 & 360,000 & 380,000 \
\hline 9.00 & 370,000 & 370,000 \
\hline 9.50 & 380,000 & 360,000 \
\hline 10.00 & 390,000 & 350,000 \
\hline 10.50 & 400,000 & 340,000 \
\hline
\end{array}$$ Table 4-8 shows the demand and supply schedules for the low-skilled labor market in the city of Westover.
-Refer to Table 4-8.If a minimum wage of $9.50 is mandated there will be a

Accepted Answer

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

Question 14

$$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Hourly Wage } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Labor } \
\text { Supplied }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Labor } \
\text { Demanded }
\end{array} \
\hline \$ 8.00 & 350,000 & 390,000 \
\hline 8.50 & 360,000 & 380,000 \
\hline 9.00 & 370,000 & 370,000 \
\hline 9.50 & 380,000 & 360,000 \
\hline 10.00 & 390,000 & 350,000 \
\hline 10.50 & 400,000 & 340,000 \
\hline
\end{array}$$ Table 4-8 shows the demand and supply schedules for the low-skilled labor market in the city of Westover.
-Refer to Table 4-8.If a minimum wage of $10.00 is mandated there will be a

Accepted Answer

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

Question 15

In cities with rent controls,the actual rents paid can be higher than the legal maximum.One explanation for this is

Accepted Answer

Rent control laws create a shortage of apartments by reducing the incentive for landlords to maintain and improve their properties. As a result, there are often more potential tenants than there are available apartments, which allows landlords to charge higher rents than the legal maximum. This happens because tenants are willing to pay more than the legal maximum to secure a place to live in the city.

Question 16

$$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Hourly Wage } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Labor } \
\text { Supplied }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Labor } \
\text { Demanded }
\end{array} \
\hline \$ 8.00 & 350,000 & 390,000 \
\hline 8.50 & 360,000 & 380,000 \
\hline 9.00 & 370,000 & 370,000 \
\hline 9.50 & 380,000 & 360,000 \
\hline 10.00 & 390,000 & 350,000 \
\hline 10.50 & 400,000 & 340,000 \
\hline
\end{array}$$ Table 4-8 shows the demand and supply schedules for the low-skilled labor market in the city of Westover.
-Refer to Table 4-8.If a minimum wage of $9.50 an hour is mandated,what is the quantity of labor supplied?

Accepted Answer

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

Question 17

When Airbnb customers in Malibu start paying hotel taxes,this will have the potential to raise the equilibrium price in this market and,therefore,decrease efficiency.This would have a tendency to

Accepted Answer

When customers of Airbnb in Malibu start paying hotel taxes, the increased cost will likely lead to a decrease in demand for Airbnb rentals in the area. This decrease in demand will lead to a decrease in consumer surplus (as consumers are paying more for the same service) and an increase in deadweight loss (as there is now less economic activity occurring in the market). There may be a slight increase in revenue for the government collecting the tax, but overall, the market will become less efficient.

Question 18

$$\begin{array} { | c | c | c | } 
\hline \begin{array} { c } 
\text { Hourly Wage } \
\text { (dollars) }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Labor } \
\text { Supplied }
\end{array} & \begin{array} { c } 
\text { Quantity of } \
\text { Labor } \
\text { Demanded }
\end{array} \
\hline \$ 8.00 & 350,000 & 390,000 \
\hline 8.50 & 360,000 & 380,000 \
\hline 9.00 & 370,000 & 370,000 \
\hline 9.50 & 380,000 & 360,000 \
\hline 10.00 & 390,000 & 350,000 \
\hline 10.50 & 400,000 & 340,000 \
\hline
\end{array}$$ Table 4-8 shows the demand and supply schedules for the low-skilled labor market in the city of Westover.
-Refer to Table 4-8.If a minimum wage of $9.50 an hour is mandated,what is the quantity of labor demanded?

Accepted Answer

Looking at the demand schedule in Table 4-8, we can see that at a wage of $9.50 an hour, the quantity of labor demanded is 360,000. This is where the demand curve intersects with the horizontal line representing a wage of $9.50, indicating the quantity demanded at that wage level.

Question 19

David Card and Alan Krueger conducted a study of fast-food restaurants in New Jersey and Pennsylvania.The study found that

Accepted Answer

The study found that increases in the minimum wage had a very small impact on employment. Option A is incorrect as the study did not find a large reduction in employment of low-skilled workers. Option B is not mentioned in the study. Option D is not supported by the information given in the study.

Question 20

Suppose a price floor on sparkling wine is proposed by the Health Minister of the country of Vinyardia.What will be the likely effect on the market for sparkling wine in Vinyardia?

Accepted Answer

The answer of Suppose a price floor on sparkling wine...

Quiz 4: Economic Efficiency, government Price Setting, and Taxes

In the economic sense,almost everything is scarce.________ of a good or service occurs when the quantity demanded is greater than the quantity supplied at the current market price.

Suppose a price floor on sparkling wine is proposed by the Health Minister of the country of Vinyardia.What will be the likely effect on the market for sparkling wine in Vinyardia?

By charging the equilibrium price for shared rides as opposed to the government-regulated price charged by traditional taxi companies,Uber has

Which of the following is not a result of imposing a rent ceiling?

Which of the following is not a result of government price controls?

Economists are reluctant to state that price controls are desirable or undesirable because

When ________ in a market,the total net benefit to society is maximized.

Congress passed the ________ in 1996,the purpose of which was to phase out price floors and return to a free market in agriculture

In cities with rent controls,the actual rents paid can be higher than the legal maximum.One explanation for this is

When Airbnb customers in Malibu start paying hotel taxes,this will have the potential to raise the equilibrium price in this market and,therefore,decrease efficiency.This would have a tendency to

David Card and Alan Krueger conducted a study of fast-food restaurants in New Jersey and Pennsylvania.The study found that

Suppose a price floor on sparkling wine is proposed by the Health Minister of the country of Vinyardia.What will be the likely effect on the market for sparkling wine in Vinyardia?