Foundations of economics 6th by parkin ch07 clicker questions

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Government
Actions in Markets

7
CLICKER QUESTIONS

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Checkpoint 7.1

Checkpoint 7.2

Checkpoint 7.3

Question
Question 11

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Question 44

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Question 88

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Question 22

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Question 55

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Question 99

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Question 33

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Question 66

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Question 10

10

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Question 77

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CHECKPOINT 7.1

Question 1
A price ceiling is a government regulation that makes it
illegal to charge a price _______.
A.
B.
C.
D.
E.

below the equilibrium price
above the equilibrium price
above what most people can afford
above some specified level
that differs from the market equilibrium price

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CHECKPOINT 7.1

Question 2
If the government imposes a rent
ceiling of $400 a month in the
housing market shown, it will
create
A. a shortage of 2,000 units.
B. a shortage of 4,000 units.
C. a surplus of 2,000 units.
D. a surplus of 4,000 units.
E. no shortage or surplus of units.

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CHECKPOINT 7.1

Question 3
Rent ceilings ________.
A. will help eliminate the problem of scarcity
B. allocate resources efficiently
C. ensure that housing goes to the poorer people
D. benefit the people who live in rent-controlled apartments
E. benefit landlords because they know what rent to charge
their tenants

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CHECKPOINT 7.2

Question 4
A minimum wage set above the equilibrium wage rate
_____.
A. increases the quantity of labor services supplied but
does not change the quantity of labor demanded
B. decreases the quantity of labor services demanded but
does not change the quantity of labor supplied
C. shifts the labor supply curve rightward
D. shifts the labor demand curve leftward
E. increases the amount of unemployment

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CHECKPOINT 7.2

Question 5
If a minimum wage is set is above the equilibrium wage rate,
_______.
A.
B.
C.
D.

the quantity of labor services demanded increases
job search activity increases
the supply of labor increases
unemployment decreases because more workers accept
jobs at the higher minimum wage rate
E. the quantity of labor supplied decreases because

unemployment increases

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CHECKPOINT 7.2

Question 6
If a minimum wage is set above the equilibrium wage rate,
________.
A.
B.
C.
D.
E.

the outcome in the labor market is inefficient
both workers’ and firms’ surpluses shrink
resources used in job search increases
both options A and C occur
options A, B, and C occur

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CHECKPOINT 7.2

Question 7
If the government increases the minimum wage rate,
_________.

A. both employment and unemployment will decrease
B. the deadweight loss will increase
C. fewer resources will be lost in job search
D. the labor market will be more efficient
E. workers’ surplus will increase

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CHECKPOINT 7.3

Question 8
To keep the market price equal to the price support, the
government must ________.
A. buy some of the good produced
B. export some of the good produced
C. receive a subsidy from the producers
D. insure that imports are readily available
E. be careful to always set the price support below the
equilibrium price

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CHECKPOINT 7.3

Question 9
The figure shows a price
support program in an
agricultural market. The amount

of the subsidy necessary to
keep the price at the support
price is _______.
A.
B.
C.
D.
E.

$4 a ton
$32,000
$8,000
$16,000
$24,000

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CHECKPOINT 7.3

Question 10
A price support with a subsidy ____ .
A. increases consumer surplus, and the quantity produced is
efficient
B. increases producer surplus, but the quantity produced is
inefficient
C. increases both consumer surplus and producer surplus
D. lowers producers’ marginal cost of production and does not
create a deadweight loss
E. does not create a surplus, so the quantity produced is

efficient
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