Question 1

Which of the following is not a consequence of minimum wage laws?

Accepted Answer

A)  Low-skilled workers are hurt because minimum wage reduces the number of jobs providing low-skilled workers with training.
B)  Employers will be reluctant to offer low-skilled workers jobs with training.
C)  Producers have an incentive to offer workers non-wage benefits such as health care benefits and convenient working hours rather than a higher wage.
D)  Some workers benefit when the minimum wage is increased.E) All of the above
F) A) and B)

Question 2

Figure 4-5
  
Figure 4-5 shows the market for apartments in Springfield. Recently, the government imposed a rent ceiling of $1,000 per month.
-Refer to Figure 4-5.Suppose that instead of a rent ceiling, the government imposed a price floor of $2,000 per month for apartments.What is the value of consumer surplus after the imposition of the price floor?

Accepted Answer

A)  $25,000
B)  $50,000
C)  $200,000
D)  $250,000E) None of the above
F) All of the above

Question 3

A tax that imposes a small excess burden relative to the tax revenue that it raises is

Accepted Answer

A)  a payroll tax.
B)  a sin tax.
C)  an efficient tax.
D)  a FICA tax.E) A) and D)
F) A) and B)

Question 4

Figure 4-2
 
-Refer to Figure 4-2.What area represents the increase in producer surplus when the market price rises from P₁ to P₂?

Accepted Answer

A)   B + D
B)  A + C + E
C)  C + E
D)  A + BE) B) and C)
F) C) and D)

Question 5

When Congress passed a law that imposed a tax designed to fund its Social Security and Medicare programs, it wanted employers and workers to share the burden of the tax equally.Most economists who have studied the incidence of the tax have concluded

Accepted Answer

A)  the tax is not high enough to cover the future costs of Social Security and Medicare.
B)  the tax on employers is too high because it reduces the employment of low-skilled workers.
C)  the burden of the tax falls almost entirely on workers.
D)  the tax rate should be greater for high-income workers than for low-income workers.E) A) and B)
F) A) and D)

Question 6

Figure 4-1
  
Figure 4-1 shows Arnold's demand curve for burritos.
-Refer to Figure 4-1.What is the total amount that Arnold is willing to pay for 2 burritos?

Accepted Answer

A)  $2.00
B)  $4.50
C)  $7.50
D)  $10.00E) A) and B)
F) All of the above

Question 7

Economic surplus

Accepted Answer

A)  does not exist when a competitive market is in equilibrium.
B)  is equal to the sum of consumer surplus and producer surplus.
C)  is the difference between quantity demanded and quantity supplied when the market price for a product is greater than the equilibrium price.
D)  is equal to the difference between consumer surplus and producer surplus.E) B) and C)
F) A) and D)

Question 8

Rent control is an example of

Accepted Answer

A)  a subsidy for low-skilled workers.
B)  a price floor.
C)  a price ceiling.
D)  a black market.E) All of the above
F) A) and B)

Exam 4: Economic Efficiency, Government Price Setting, and Taxes

Correct Answer
verified

Economic surplus

Correct Answer
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Which of the following is not a consequence of minimum wage laws?

Correct Answer
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Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.What is the total amount that Arnold is willing to pay for 2 burritos?

Correct Answer
verified

When Congress passed a law that imposed a tax designed to fund its Social Security and Medicare programs, it wanted employers and workers to share the burden of the tax equally.Most economists who have studied the incidence of the tax have concluded

Correct Answer
verified

Rent control is an example of

Correct Answer
verified

Figure 4-2 -Refer to Figure 4-2.What area represents the increase in producer surplus when the market price rises from P₁ to P₂?

Correct Answer
verified

A tax that imposes a small excess burden relative to the tax revenue that it raises is

Correct Answer
verified

Exam 4: Economic Efficiency, Government Price Setting, and Taxes

Correct AnswerverifiedShow Answer

Economic surplus

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Which of the following is not a consequence of minimum wage laws?

Correct AnswerverifiedShow Answer

Figure 4-1 Figure 4-1 shows Arnold's demand curve for burritos. -Refer to Figure 4-1.What is the total amount that Arnold is willing to pay for 2 burritos?

Correct AnswerverifiedShow Answer

When Congress passed a law that imposed a tax designed to fund its Social Security and Medicare programs, it wanted employers and workers to share the burden of the tax equally.Most economists who have studied the incidence of the tax have concluded

Correct AnswerverifiedShow Answer

Rent control is an example of

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Figure 4-2 -Refer to Figure 4-2.What area represents the increase in producer surplus when the market price rises from P₁ to P₂?

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A tax that imposes a small excess burden relative to the tax revenue that it raises is

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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