ch6 government actions in market testbank

ch6 government actions in market testbank - C h a p t e r 6...

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201 6 MARKETS IN ACTION ± Housing Markets and Rent Ceilings Topic: Market Response to a Decrease in Supply Skill: Analytical 1) The short-run impact of the San Francisco earth- quake on the housing market shifted the A) short-run supply curve of housing leftward. B) long-run supply curve of housing leftward. C) short-run supply curve of housing rightward. D) long-run supply curve of housing rightward. Answer: A Topic: Market Response to a Decrease in Supply Skill: Recognition 2) The immediate result of the 1906 San Francisco earthquake on the housing market was to decrease A) the short-run supply, raise rents, and decrease the equilibrium quantity. B) the short-run supply, reduce rents, and increase the equilibrium quantity. C) housing demand, reduce rents, and decrease the equilibrium quantity. D) housing demand, raise rents, and increase the equilibrium quantity. Answer: A Topic: Long-Run Adjustments to a Decrease in Supply Skill: Analytical 3) If after the 1906 San Francisco earthquake the cost of building an apartment was the same re- gardless of whether there were 50,000 or 150,000 apartments in existence, then the A) short-run supply of apartments was perfectly elastic. B) short-run supply of apartments was perfectly inelastic. C) long-run supply of apartments was perfectly elastic. D) long-run supply of apartments was perfectly ine- lastic. Answer: C Topic: Long-Run Adjustments to a Decrease in Supply Skill: Analytical 4) After the initial decrease in supply, as part of the long-run adjustment of the housing market fol- lowing the San Francisco earthquake, the A) long-run supply curve shifted leftward. B) long-run supply curve shifted rightward. C) short-run supply curve shifted rightward. D) short-run supply curve shifted even more left- ward. Answer: C Topic: A Housing Market Skill: Analytical 5) In the figure above, the initial demand curve is D 0 . There are no rent ceilings nor rent floors. Thus, the initial equilibrium monthly rent is A) $100 per month. B) $200 per month. C) $300 per month. D) $400 per month. Answer: C Chapter
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202 CHAPTER 6 Topic: A Housing Market Skill: Analytical 6) In the figure above, the demand curve shifts rightward from D 0 to D 1 . There are no rent con- trols. In the short run, the increase in demand re- sults in A) higher rents and a decrease in the equilibrium quantity. B) lower rents and a decrease in the equilibrium quantity. C) higher rents and an increase in the equilibrium quantity. D) lower rents and an increase in the equilibrium quantity. Answer: C Topic: A Regulated Housing Market Skill: Analytical 7) In the figure above, the demand curve shifts rightward from D 0 to D 1 so that D 1 is the rele- vant demand curve. Suppose the government im- poses a rent ceiling of $300 per month. In the short run there will be A) a shortage of 500,000 apartments. B)
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ch6 government actions in market testbank - C h a p t e r 6...

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