Principles Of Microeconomics Worksheet With Answer Key

Principles Of Microeconomics Worksheet With Answer Key - 2007 Page 4

21) The decrease in consumer surplus and producer surplus that results from an inefficient level of

21)

production is called the

A) external benefit.

B) big tradeoff.

C) external cost.

D) deadweight loss.

22) When a deadweight loss occurs in a market, we can be certain that

22)

A) the market is a monopoly.

B) there underproduction in the market.

C) the entire society experiences a loss.

D) taxes have been imposed in a market.

23) A rent ceiling results in a shortage. As a result, which of the following do you expect?

23)

A) Discrimination as landlords choose their tenants, possibly based on race, age, or gender.

B) The shortage will persist as long as the ceiling is in effect.

C) A black market for apartments whereby higher rents are obtained through various other

charges.

D) All of the above would be expected.

24) A price floor is

24)

A) a price below which a seller cannot legally sell.

B) a price above which a seller cannot legally sell.

C) a price that creates a surplus of the good if it is set above the equilibrium price.

D) Both answers A and C are correct.

25) Suppose the equilibrium wage is $10 per hour. An effective ________ would be set at ________.

25)

A) price ceiling; $10 per hour

B) price floor; $8 per hour

C) price floor; $12 per hour

D) price ceiling; $12 per hour

Principles Of Microeconomics Worksheet With Answer Key - 2007 Page 4