1			Suppose that after the imposition of a minimum wage of $6.50, a number of new day-care centres open up, increasing the demand for workers by 400. In what way would this market be affected?
			A)	The wage would increase to $7, and there would be no unemployment.
			B)	The wage would remain at $6.50, but there would now be no unemployment.
			C)	The wage would remain at $6.50, and there would now be 200 unemployed day-care workers.
			D)	The wage would remain at $6.50, and there would now be 200 job vacancies.
			E)	The wage would drop to $5, and there would be no unemployment.
2			Under what circumstances might an illegal market exist?
			A)	When a price ceiling is imposed
			B)	When a price floor is imposed
			C)	When price is not at equilibrium
			D)	When there is a big surplus of a product

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=png::::/sites/dl/free/1259030687/1059318/Ch03_Intermediate_Q3_4.PNG','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (27.0K)</a>

3			Refer to the figure above when answering this question. What would be the result if an effective price floor is set that is $2 different from the equilibrium price?
			A)	The price would be above equilibrium, and a surplus of 60 would be produced.
			B)	The price would be below equilibrium, and a shortage of 60 would be produced.
			C)	The price would be above equilibrium, and a shortage of 60 would be produced.
			D)	The price would be below equilibrium, and a surplus of 60 would be produced.

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=png::::/sites/dl/free/1259030687/1059318/Ch03_Intermediate_Q3_4.PNG','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (27.0K)</a>

4			Refer to the figure above when answering this question. What would be the result if an effective price ceiling is set that is $2 different from the equilibrium price?
			A)	The price would be above equilibrium, and a surplus of 60 would be produced.
			B)	The price would be below equilibrium, and a shortage of 60 would be produced.
			C)	The price would be above equilibrium, and a shortage of 60 would be produced.
			D)	The price would be below equilibrium, and a surplus of 60 would be produced.

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=gif::::/sites/dl/free/1259030687/1059318/Figure3_17.gif','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (30.0K)</a>

5			Refer to the figure above to answer this question. What will the price and revenue received by farmers be if a quota of 400 kilos is imposed?
			A)	$6 and $2400
			B)	$6 and $3600
			C)	$8 and $4800
			D)	$8 and $3200
			E)	$9 and $3600
6			Why is the market’s allocation of products preferable to that of either the producers or government?
			A)	Because it ensures that even the poor will be able to afford to buy everything
			B)	Because it ensures that only people who really need certain products will be able to afford them
			C)	Because it ensures that both demand and supply factors are taken into consideration
			D)	Because it will mean that scarce resources are available at low prices
			E)	Because it ensures that the income distribution of the population is ignored