# The Figure below illustrates the market for rental apartments in Clarksville. Use it to answer questions 1 through 5.

Chapter 6 Homework (eleven questions)

Two point questions:

The Figure below illustrates the market for rental apartments in Clarksville.  Use it to answer questions 1 through 5.

1. What are the equilibrium rent and equilibrium quantity of rental apartments?

1. If a rent ceiling is set at \$500 a month, what is the quantity of apartments rented?

1. If a rent ceiling is set at \$500 a month, what is the shortage of apartments?

1. If a rent ceiling is set at \$500 a month, what is the maximum price that someone is willing to pay for the last apartment available?

1. If a rent ceiling is set at \$700 a month, what is the quantity of apartments rented?

1. If a rent ceiling is set at \$700 a month, what is the shortage of apartments?

The table below gives the demand and supply schedules of teenage labor.  Use it to answer questions 7 through 10.

 Wage rate (dollars per hour) Quantity demanded Quantity supplied (hours per month) 6 25,000 5,000 7 20,000 10,000 8 15,000 15,000 9 10,000 20,000 10 5,000 25,000

1. What are the equilibrium wage rate and number of hours worked?

1. What is the quantity of unemployment at the equilibrium wage?

1. If a minimum wage for teenagers is set at \$9 an hour, how many hours do teenagers work and how many hours are unemployed?

1. If the demand for teenage labor increases by 10,000 hours a month, what is the wage rate paid to teenagers and how many hours of teenage labor are unemployed?

1. As the price elasticity of demand decreases (becomes more inelastic), the size of the price increase resulting from a tax (goes up or goes down?) and the share of the tax borne by consumers (goes up or goes down?).