1. If the United Auto Workers union can obtain a substantial
wage increase for auto workers, the price of automobiles will rise. The rise
can be attributed to
a. a shift to the right in the supply curve for automobiles.
b. a shift to the left in the supply curve for automobiles.
c. a shift to the right in the demand curve for automobiles.
d. a shift to the left in the demand curve for automobiles.
2. When a price floor is above the equilibrium price,
a. quantity demanded will exceed quantity supplied.
b. quantity supplied will exceed quantity demanded.
c. the market will be in equilibrium.
d. This is a trick question because price floors generally exist below the equilibrium price.
3. Rent control applies to about two-thirds of the private
rental housing in New York City. Economic theory suggests that the below-equilibrium
prices established by rent controls would
a. redistribute income from tenants to landlords.
b. promote a rapid increase in the future supply of housing.
c. result in poor service and quality deterioration of many rental units.
d. lead to a reduction in housing discrimination against minorities.
4. Which of the following is the most likely result of
an increase in the minimum wage?
a. an increase in the employment of unskilled workers
b. a decrease in the unemployment rate of unskilled workers
c. an increase in the demand for unskilled workers
d. a decrease in the employment of unskilled workers