4. Which of the following is true about labor markets? a The minimum wage is pri

Question

4. Which of the following is true about labor markets? a The minimum wage is price ceiling b.Unemployment is a labor shortage. c. Firms supply the labor d.None of the above 5What will be the effect of a nonbinding price ceiling? a A surplus will be created. bA shortage will be created CThere will be no effect. d? The effect is unknown. 6-What is one unintended consequence of rent control? a People in rent-controlled units will relocate more often. Landlords may not maintain rental units. Too many apartments will be built, creating a surplus of units, d.People will choose not to live in big cities

Explanation / Answer

1. None of the above is true. Minimum wage is a form of price floor and not a price ceiling.

2. A non binding price ceiling will not have any effect on the market because it will not affect the equilibrium.

3. A rent control is generally a price ceiling, that means the maximum rent that landlord can charge from the tenants. If they get a lower rent due to the price ceiling, then there won't be any incentive for them to maintain the rental units. Option b

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