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Chapter 4: Labor and Financial Markets

Practice

Answer first, then reveal. Anything you mark Unsure or Missed goes to your review queue.

12 of 12 have the textbook's official worked answer.

  • 1

    In the labor market, what causes a movement along the demand curve? What causes a shift in the demand curve?

  • 2

    In the labor market, what causes a movement along the supply curve? What causes a shift in the supply curve?

  • 3

    Why is a living wage considered a price floor? Does imposing a living wage have the same outcome as a minimum wage?

  • 4

    In the financial market, what causes a movement along the demand curve? What causes a shift in the demand curve?

  • 5

    In the financial market, what causes a movement along the supply curve? What causes a shift in the supply curve?

  • 6

    If a usury law limits interest rates to no more than 35%, what would the likely impact be on the amount of loans made and interest rates paid?

  • 7

    Which of the following changes in the financial market will lead to a decline in interest rates: a. a rise in demand b. a fall in demand c. a rise in supply d. a fall in supply

  • 8

    Which of the following changes in the financial market will lead to an increase in the quantity of loans made and received: a. a rise in demand b. a fall in demand c. a rise in supply d. a fall in supply

  • 9

    Identify the most accurate statement. A price floor will have the largest effect if it is set: a. substantially above the equilibrium price b. slightly above the equilibrium price c. slightly below the equilibrium price d. substantially below the equilibrium price Sketch all four of these possibilities on a demand and supply diagram to illustrate your answer.

  • 10

    A price ceiling will have the largest effect: a. substantially below the equilibrium price b. slightly below the equilibrium price c. substantially above the equilibrium price d. slightly above the equilibrium price Sketch all four of these possibilities on a demand and supply diagram to illustrate your answer.

  • 11

    Select the correct answer. A price floor will usually shift: a. demand b. supply c. both d. neither Illustrate your answer with a diagram.

  • 12

    Select the correct answer. A price ceiling will usually shift: a. demand b. supply c. both d. neither