Foundations of Economics (8th Edition)
Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 7, Problem 5MCQ
To determine

To choose: The appropriate option to fill in the blanks in the given statement.

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A market with a price floor creates   Group of answer choices   A: a shortage of goods and services in the market. B: a greater quantity demanded in the market than quantity supplied. C: excess demand for goods and services. D: a surplus of goods and services in the market.
1) As the price level falls, the value of money falls. True / False 2) When a minimum-wage law forces the wage to remain above the level that balances supply and demand, the result is a shortage of labor. True / False
Markets seek equilibrium, and the demand for goods and services will come to an equilibrium with supply of goods and services.  When markets are not in equilibrium, surpluses and shortages, as well as underground markets, can exist.  Sometimes, the government may want to intervene in markets to try to help reduce economic hardships.         Analyze the impact of an increase in the minimum wage from the current level to $15 per hour.  How would the following be affected? a.  employment of people previously earning less than $15 per hour b.  the unemployment rate of teenagers c.  the availability of on-the-job training for low-skilled workers d.  the demand for high-skilled workers who are good substitutes for low-skilled workers Review the mechanics of price floors and price ceilings.  Why does a price floor lead to surpluses?  Why does a price ceiling lead to shortages?  Review consumer and producer surplus.  A price floor will lead to a transfer of consumer surplus to producer…
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