Question

If a price ceiling is imposed below equiibrium in the market for apartments: a. it results in a surplus of rental units in the near future. b. it acts as an incentive to landlords to invest more money in their property to attract more tenants c. it results in many rental units being poorly maintained. d. it reduces the amount of housing discrimination against minorities. it reduces the resulting shortage by allowing further pice reducins 23. Ifthe minimum wage for teenagers increased to a wage higher that their wage, what would be the likely effect on their wage and employment? Wage a. IncreaseNo effect b. c. Increase Decrease Increase Increase d. DecreaseIncrease o. Decrease Decrease 24. The supply curve wil be more elastic when a. a good has many substitutes b. firms have more time in which to respond to the price change c. demand is elastic d. demand is inelastic. 25. At the equilbrium price in a market, a. there is a tendency for prices to rise. b. there is a tendency for prices to fall. c. there is no longer a tendency for prices to rise or fatl d. quantity supplied exceeds quantity demarded e. quantity demanded exceeds quantity supplied 26. Suppose the equilibrium market price of com is $16 per bushel when the government sets a price ceiling of $18 per bushel. As a result a. the quantity demanded of com will decline b. there will now be a shortage of corn in the market c. the market price of corn will remain at $16 per bushel d. the market price of com will decline as the presence of the price celing will create a surplus e. the quantity supplied of com wil increase 27. For which of the following pairs of goods is the cross-price elasticity of demand postive? a. tennis balls and tennis rackets C. airline trips and textbooks CDs and laundry detergent d. beef and chicken 28. If the price of a good decreases while the quantity of the good exchanged on markets increases, then the most likely explanation is that there has been a. an increase in demand b. a decrease in demand c an increase in supply d. a decrease in supply

Answer 1

22. C
(There will be shortage of rental units as supply would be less than demand so it would result in many rental units being poorly maintained.)

23. C
(As minimum wage rise above equilibrium, wage increases but demand for labor deceases so employment decreases.)

24. B
(Supply is more elastic in longer run.)

25. C
(Price will remain at equilibrium.)

26. C
(Price ceiling above equilibrium is ineffective because price will remain at equilibrium.)

27. D
(These goods are substitutes so their cross price elasticity would be positive.)

28. C
(Increase in supply decrease price and increase quantity traded.)