Question

5. According to the information we examined regarding minimum wages in theu following statements is true? s, which of the a. All states in the U.S. currently use the same minimum wage rate b. The majority of workers that earn at or near the minimum wage in the US. are under 20 years of age The value of the minimum wage, relative to the average wage in the economy, has generally declined over the last 50 years The minimum wage was created in 1825 by General Custer All of the above c. d. e. 6. Consider the use of rent control policies for apartment buildings. Which set of words best fills in the blanks in the following statement: Rent control policies are expected to create a the market, and this will be a more severe problem in the in a. Shortage, short-run b. Shortage, long-run c. Monkey, coconuts d. Surplus, short-run e. Surplus, long-run Refer to the graph below for questions 7-9 Supply Price 20 15 Demand 40 50 80104 130 Quantity Suppose the market in the graph is originally in equilibrium at a price of $15. If the government implements a price ceiling at $20, what will be the market outcome? 7. a. Surplus of 90 units b. Surplus of 54 units c. Shortage of 90 units d. Shortage of 54 units e. Market will remain in equilbrium with a quantity of 80. If the market is in equilibrium, then the government implements a price ceiling at $12, the quantity demanded will change by a greater amount than the quantity supplied 8. a. True b. False 9. Suppose the market in the graph is originally in equililbrium at a price of $15. If the government imposes a price floor at $20, what will happen to quantity demanded? a. b. c. d. e. It will increase by 40 It will decrease by 40 It will increase by 50 It will decrease by 50 There will be no change in quantity supplied with this price floor

Answer 1

(a) Surplus of 90 unit is correct option Because at $20 The quantity demanded = 40 $20 Quantity supplied = 130 Quantity supplied > Quantity demanded doublerightarrow mean supplies = Q_c - Q_n = 130 - 40 = 90 (8) FALSE Quantity supplied change more than Quantity demanded delta Quantity supplied = 80 - 50 = 30 delta Quantity demanded = -80 + 104 = 24 (9) It will demanded by 40 in correct option Because at$20 Quantity demanded = 40 $15 Quantity demanded = 80 Charge = 80 - 40 = 40