Macroeconomics ch.4 quiz

A law establishing a minimum legal price for a g/s (minimum wage) is known as

Price floor

A price floor that sets the price of a good above the market equilibrium will cause

a. a decrease in the qdem b. an increase in qsupp c. a surplus of the good *it is all of the above*

A minimum wage that is set above a market equillibrium wage will result in

an excess supply of labor, that is, unemployment

Which of the following would tend to increase the wage of coal miners?

an increase iin the price of oil, a substitute for coal

The imposition of price ceilings on a market often results in

an increase in expenditures in the black market

Which of the following is most likely the outcome of minimum wage laws?

an increase in the quantity of labor supplied by workers and a decrease in the quantity of labor demanded by firms

When a supply and demand model is used to analyze the market for labor,

b. the wage rate is used on the vertical axis as the market price c. employment is used on the horizontal axis as the market quantity

The burden of a tax will fall primarily on buyers when the

demand for a product is highly inelastic and the supply is relatively elastic

The burden of a tax will fall primarily on sellers when the

demand for the product is highly elastic and the supply is relatively inelastic

The actual burden of tax

falls most heavily on the side of the market that is more inelastic.

A new law requiring plumbers to pass strict certification tests that reduce the number of plumbers would

increase the wage rate of plumbers

Because of price controls in the former soviet Union, people often waited in long lines for food and other necessities. Modern economic theory would indicate that, relative to price rationing, waiting in line is

less efficient because the time spend waiting in line imposes an OPC on the buyer that does not generate revenue for the seller

A tax imposed on the sellers of a good will

raise the price paid by buyers and lower the equilibrium quantity

Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling,

the quantity demanded of physicals increase and the quantity supplied of physicals decrease

The actual incidence (or burden) of a tax refers to

who actually bears the burden of tax onces changes in market prices are taken into account