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
