Quiz 6 Multiple choice questions

Choose the statement that is incorrect. A. When a price is regulated and there is a​ shortage, search activity increases. B. The time spent looking for someone with whom to do business is called search activity. C. The opportunity cost of a good is equal to its price plus the value of the search time spent finding the good. D. Search activity occurs only in markets where there is a shortage.

D

Choose the statement that is incorrect. A. In a labor market with an effective minimum​ wage, the marginal social benefit of labor is less than its marginal social cost. B. The marginal social cost of labor to workers is leisure forgone. C. The minimum wage results in increased job search. Your answer is not correct. D. An unregulated labor market allocates the​ economy's scarce labor resources to the jobs in which they are valued most highly.

A

With loose enforcement of a rent​ ceiling, _______.

the black market rent is close to the unregulated rent

When an effective production quota is applied in the market for​ rice, the quantity produced​ ______ and the price​ ______.

​decreases; rises

A minimum wage set above the equilibrium wage rate​ _______.

creates unemployment

When an effective minimum wage is​ introduced, the number of hours of labor employed is determined by the​ ______ and the​ ______.

demand for​ labor; minimum wage

The more​ ______ the​ demand, ______.

elastic; the larger is the amount of the tax paid by sellers

In the market for​ potatoes, the marginal social cost​ _______ marginal social benefit.

exceeds

When an effective production quota is applied in the market for​ rice, the marginal social benefit _____ marginal social cost

exceeds

When a subsidy is paid to potato​ growers, the market equilibrium quantity of potatoes​ ______ and market price​ ______.

increases; falls

When the rent is not permitted to allocate scarce​ housing, ______.

neither a lottery nor​ first-come, first-served is a fair allocation method

Concerned about the political fallout from rising gas prices, the U.S. government decides to impose a price ceiling on gasoline of $4.00 a gallon. If the oil-producing nations increase production and drive the equilibrium price of gasoline to $3.00 a gallon, _____. The market for gasoline is _____.

neither a surplus nor a shortage of gasoline emerges and a black market does not emerge; efficient