Chapter 6 Tutorial Questions
Section A: Multiple Choice Questions
1.Macroeconomics differ from microeconomics in that:
a) Macroeconomics studies the decisions of individuals.
b) Microeconomics looks at the economy as a whole.
c) Macroeconomics studies the behavior of government while microeconomics
looks at private corporations.
d) Macroeconomics focuses on the national economy and the global economy.
2. A rent ceiling results in a shortage. As a result, which of the following do you expect?
a) A shortage of applicants for the apartment available.
b) Discrimination as tenants choose their landlords, possibly based on race, age,
or gender.
c) A black market for apartments whereby higher rents are obtained through
various other charges.
d) In the long-run, more and more people will want to become landlords.
3. A minimum wage set above the equilibrium wage rate is a price
A) ceiling that results in a shortage of low-skilled labor.
B) ceiling that results in a surplus of low-skilled labor.
C) floor that results in a shortage of low-skilled labor.
D) floor that results in a surplus of low-skilled labor.
4. The above figure shows the apartment rental market in Bigtown. If the Bigtown
Housing
Authority imposes a rent ceiling of $500 per apartment, the deadweight loss will be
A) $1 000 000
B) $500 000
C) $250 000
D) $125 000
5. In the figure above, D0 is the demand for labour curve. Imposing a minimum wage of
$6 per hour will initially
a) Increase employment from 20 to 40 million hours per year.
b) Increase employment from 30 to 40 million hours per year.
c) Decrease employment from 40 to 20 million hours per year.
d) Decrease employment from 30 to 20 million hours per year.
6. The demand and the supply for a good are each neither perfectly elastic nor perfectly
inelastic. Imposing a sales tax on sellers of the good is
a) Paid by only buyers.
b) Paid by only sellers.
c) Paid by both buyers and sellers.
d) Paid by neither buyers nor sellers.
7. The figure above shows the demand for and supply of rental housing in Smallton. If a
rent ceiling is set at $800, what is the rent?
A)
$800.
B)
$600.
C)
$400.
D)
None of the above answers is correct.
8. The figure above shows the market for coffee in Roastboro. If a tax on coffee of 75
cents per pound is imposed on sellers, what is the price that sellers receive and
keep?
a) $3.50 a pound.
b) $3.75 a pound.
c) $4.50 a pound.
d) $4.75 a pound.
9. If the selling of drugs is made illegal,
a) The demand curve shifts rightward.
b) The supply curve shifts rightward.
c) The demand curve shifts leftward.
d) The supply curve shifts leftward.
Section B
Wage rate
(rands per hour)
6
Quantity
demanded
(hours per month)
800
Quantity supplied
(hours per
month)
400
8
700
500
10
600
600
12
500
700
14
400
800
10.1 The table above shows the demand for and supply of labor in a small developing
country. What are the equilibrium wage and the level of employment? (2)
10.2 Currently the minimum wage rate is set at R9 per hour. How many hours are
worked and how many hours of labor are unemployed? (2)