Q: If the government imposes a wage ceiling of $$3$$ per hour in the above labor market, what is the quantity of labor demanded?

$$Q_D = 10,000 - 100 \times 3 = 9,700$$

Q: If the government imposes a minimum wage of $$5$$ per hour in the same labor market, what is the quantity of labor supplied?

$$Q_S = 2,000 + 1,900 \times 5 = 11,500$$

Question 1

Suppose the price of lamb increases. What is the most likely effect on the market for steak?

Accepted Answer

The demand curve for steak shifts to the right.

Question 2

A decrease in the population will have what effect on the market for steak?

Accepted Answer

The demand curve for steak shifts to the left.

Question 3

If consumer income increases, what is the expected effect on the demand for steak, assuming steak is a normal good?

Accepted Answer

The demand curve for steak shifts to the right.

Question 4

If the price of steak sauce decreases, what is the likely effect on the market for steak?

Accepted Answer

The demand curve for steak shifts to the right.

Question 5

An increase in advertising by chicken producers is most likely to have what effect on the market for steak?

Accepted Answer

The demand curve for steak shifts to the left.

Question 6

The development of a new, lower cost mining technique will have what effect on the market for coal?

Accepted Answer

The supply curve for coal shifts to the right.

Question 7

If wages paid to coal miners increase, what is the likely effect on the market for coal?

Accepted Answer

The supply curve for coal shifts to the left.

Question 8

A new government regulation requiring air purifiers in all coal work areas will most likely cause:

Accepted Answer

The supply curve for coal to shift to the left.

Question 9

Suppose the demand for park visits is given by $$Q^* = 10,000 - 100P. If $$park visits are free, how many visitors will attend?

Accepted Answer

$$10,000$$

Question 10

Given the demand for park visits $$Q^* = 10,000 - 100P$$, what is the number of visitors if the park charges a $$20$$ admission fee?

Accepted Answer

$$8,000$$

Question 11

Suppose the demand for Motorola cell phones is $$Q_D = 300 - 0.1p - 2p_n + Y$$, where $$p is $$the price of Motorola phones, $$p_n is $$the price of Nokia phones, and $$Y is $$income. If $$p_n = 300$$ and $$Y = 3000$$, what is the equation for the demand curve for Motorola phones?

Accepted Answer

$$Q_D = 4400 - 0.1p$$

Question 12

If income increases to $$Y = 3500 ($$with $$p_n = 300$$), what is the new demand curve for Motorola cell phones?

Accepted Answer

$$Q_D = 4900 - 0.1p$$

Question 13

Given the demand for show tickets $$Q_D = 100 - p$$ and supply $$Q_S = 20 + p$$, what is the equilibrium price?

Accepted Answer

$$p = 40$$

Question 14

Given the demand for show tickets $$Q_D = 100 - p$$ and supply $$Q_S = 20 + p$$, what is the equilibrium quantity?

Accepted Answer

$$Q = 60$$

Question 15

If the supply curve for show tickets shifts to $$Q_S' = 10 + p$$ due to increased actor salaries, what is the new equilibrium price?

Accepted Answer

$$p = 45$$

Question 16

In a competitive labor market, demand is $$Q_D = 10,000 - 100W$$ and supply is $$Q_S = 2,000 + 1,900W. $$What is the equilibrium wage rate $$W^*$$?

Accepted Answer

$$W^* = 4$$

Question 17

Given the same labor market ($$Q_D = 10,000 - 100W$$, $$Q_S = 2,000 + 1,900W$$), what is the equilibrium quantity of labor employed $$Q^*$$?

Accepted Answer

$$Q^* = 9,600$$

Question 18

If the government imposes a wage ceiling of $$3$$ per hour in the above labor market, what is the quantity of labor demanded?

Accepted Answer

$$Q_D = 10,000 - 100 	imes 3 = 9,700$$

Question 19

If the government imposes a minimum wage of $$5$$ per hour in the same labor market, what is the quantity of labor supplied?

Accepted Answer

$$Q_S = 2,000 + 1,900 	imes 5 = 11,500$$

Question 20

With a minimum wage of $$5$$ per hour, what is the quantity of labor demanded in the market ($$Q_D = 10,000 - 100W$$)?

Accepted Answer

$$Q_D = 10,000 - 100 	imes 5 = 9,500$$

Question 21

If the minimum wage is set at $$5$$ per hour, what is the excess supply (unemployment) in the labor market?

Accepted Answer

$$2,000$$

Microeconomics Study Guide: Market Shifts, Demand & Supply, and Labor Markets

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