Financial Markets Test with Multiple Choice Questions Essay

Class Test 1 (Sample Items)Choose the most correct response. Record your answer on the mark sense sheet provided. Each answer is worth ½ mark.QUESTION 1All else equal, a binding price floor will cause less of a surplus if:(a)both supply and demand are inelastic(b)both supply and demand are elastic(c)supply is elastic, but demand is inelastic(d)supply is inelastic, but demand is elasticQUESTION 2The figure shows the market for books before and after an excise tax is introduced. The tax on books is ________, buyers pay ______ of tax per book, and the governments tax revenue is ________ a week.(a) $0.40 a book; $0.40; $4(b) $1.20 a book; $0.80; $128(c) $0.80 a book; $1.20; $12(d) $1.20 a book; $0.80; $12QUESTION 3If the minimum wage is set below the equilibrium wage rate,(a) a labour shortage occurs.(b) there is no change in the quantity of labour employed.(c) the short-run labour supply curve becomes more elastic.(d) a labour surplus occurs.