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Economics 1022A/B Lecture 4: Chapter 6&7 Notes

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School
Western University
Department
Economics
Course
Economics 1022A/B
Professor
Bruce Hammond

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ECON 1022A/B Full Course Notes
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ECON 1022A/B Full Course Notes
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Document Summary

Quantity of housing demanded > quantity of housing supplied shortage. Search activity: time spent looking for someone with whom to do business. Opportunity cost: not only the price of good but time spent finding good. Opportunity cost of housing = rent + time & other resources spent searching for house. Black market: illegal market where equilibrium price exceeds price ceiling. Deadweight loss shrinks consumer and producer surplus. Fair rules view unfair because blocks voluntary exchange. Fair results view are people who"re less well off able to get housing: smaller quantity of housing must be distributed lottery, first- come first-serve, discrimination, not very fair. Quantity of labor supplied > quantity of labor demanded. In labor market: msc = leisure forgone (for workers, msb = value of gods and services produced (from labor) Msb > msc deadweight loss shrinks consumer and producer surplus.

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Related Questions

1.) An excise tax on a good typically reduces the net price received by the seller. (TRUE/FALSE)

2.) The burden of an excise tax on gasoline falls entirely on consumers of gasoline. (TRUE/FALSE)

3.) Rent controls are one of the few examples of a price floor in market economies. (TRUE/FALSE)

4.) Imposing a price ceiling below the equilibrium price of a good often leads to_____.

A) A greater supply of the good

B) A black market for the good

C) A rightward shift of the supply curve for the good.

D) A leftward shift of the demand curve for the good.

E) All of these

5.) Which of the following is true of price floors and ceilings?

A) Lead to the same price and quantity as in competitive market.

B) Lead to technical efficiency

C) Cause the demand curve to shift left

D) Usually result from government intervention

E) Cause the supply curve to shift right.

6.) Price ceilings often lead to black markets. (TRUE/FALSE)

7.) When minimum wage is above the equilibrium wage what occurs?

A) There will be a shortage of labor

B) There will be no effect on the number of people employed

C) There will be an increase in unemployment rate

D) There will be a decrease in unemployment rate

8.) An excise tax on a good typically reduces the price paid by the consumer (TRUE/FALSE)

9.) If a price ceiling is below the equilibrium price is imposed on a market, it will cause the quantity demanded to rise and the quantity supplied to fall. (TRUE/FALSE)

10.) Price floors often lead to black markets. (TRUE/FALSE)

11.) If an excise tax is imposed on restaurant meals what occurs?

A) Fewer meals will be produced and sold

B) More meals will be produced and sold

C) Market price of the meals will fall

D) Government tax revenue will fall.