Question 1

One of the consequences of the minimum wage has been:

Accepted Answer

A)  decreased unemployment for low-skill workers.
B)  workers offering to work off the books for less than the minimum wage.
C)  lower production costs for small businesses.
D)  increased employment for high-skill workers.

Question 2

A binding price floor is likely to cause deadweight loss because:

Accepted Answer

A)  buyers incur additional search costs looking for the scarce good.
B)  the quantity of the good transacted is less than the equilibrium quantity transacted.
C)  a black market emerges and the good sells at prices above the price floor.
D)  some buyers who want to buy at the controlled price are unable to find a seller willing to sell at that price.

Question 3

Critics of the pharmaceutical industry often argue that price ceilings should be imposed on drug manufacturers.If this happened,the quality of drugs would improve.

Accepted Answer

A) True 
 B)False

Question 4

Use the following to answer question: 
-(Table: Market for Apartments) Use Table: Market for Apartments.If a price ceiling of $700 is imposed on this market,the result will be an inefficiency in the form of a _____ million apartments.

Accepted Answer

A)  surplus of 0.6
B)  shortage of 0.6
C)  surplus of 0.2
D)  shortage of 0.2

Question 5

Use the following to answer question: 
-(Figure: Price Controls) Use Figure: Price Controls.A price floor has been set at point b.The area of deadweight loss that results from this price floor is:

Accepted Answer

A)  egh.
B)  ghi.
C)  fgi.
D)  efg.

Question 6

(Figure: The Market for Spanish Textbooks) Use Figure: The Market for Spanish Textbooks.Suppose the government believes the producers of Spanish textbooks are not profitable,and it wants to make sure textbook producers are profitable.It could impose a control called a price _____,and for it to be binding,one possible price would be _____.

Accepted Answer

A)  floor;$90
B)  floor;$40
C)  ceiling;$40
D)  ceiling;$90

Question 7

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-(Figure: Rent Controls) Use Figure: Rent Controls.Without rent controls,the equilibrium quantity is:

Accepted Answer

A)  Q4.
B)  Q1.
C)  Q2.
D)  Q3.

Question 8

A binding price floor causes:

Accepted Answer

A)  a shortage in the market.
B)  a surplus in the market.
C)  an efficient use of resources.
D)  equilibrium.

Question 9

Producers may supply a good with inefficiently high quality if the government imposes a:

Accepted Answer

A)  price ceiling set above the equilibrium price.
B)  price floor set below the equilibrium price.
C)  binding price floor.
D)  binding price ceiling.

Question 10

Price controls encourage black markets because:

Accepted Answer

A)  they eliminate opportunity costs.
B)  individuals can profit by illegal exchanges.
C)  they create too much efficiency.
D)  they create too much equity.

Question 11

Use the following to answer question: 
-(Figure: The Market for Economics Textbooks) Use Figure: The Market for Economics Textbooks.At a price ceiling of $40,the market outcome would be a _____ of _____ textbooks.

Accepted Answer

A)  surplus;30
B)  surplus;10
C)  shortage;30
D)  shortage;10

Question 12

Use the following to answer question: 
-(Table: Market for Fried Twinkies) Use Table: Market for Fried Twinkies.In response to popular anger over the high price of fried Twinkies and the extreme wealth of fried Twinkie producers,the government imposes a price ceiling of $1.20 per fried Twinkie.From this table,the price ceiling causes a _____ fried Twinkies.

Accepted Answer

A)  shortage of 3,000
B)  shortage of 5,000
C)  surplus of 8,000
D)  surplus of 3,000

Question 13

The persistent unwanted surplus that results from a binding price floor causes inefficiencies that do NOT include:

Accepted Answer

A)  inefficiently low quality.
B)  inefficient allocation of sales among sellers.
C)  wasted resources.
D)  the temptation to break the law by selling below the legal price.

Question 14

The purpose of medallions issued in New York City in the 1930s was to:

Accepted Answer

A)  limit the number of people who used the subway during rush hour.
B)  ensure that taxicabs met standards of safety and cleanliness.
C)  give the owner the right to buy and sell securities on the New York Stock Exchange.
D)  encourage citizens to buy their own cars.

Question 15

A price ceiling benefits all consumers.

Accepted Answer

A) True 
 B)False

Question 16

A binding price ceiling is usually designed to:

Accepted Answer

A)  keep prices below the equilibrium level.
B)  increase the quality of the good.
C)  prevent shortages.
D)  increase efficiency.

Question 17

Rent controls set a price ceiling below the equilibrium price,and therefore:

Accepted Answer

A)  quantity supplied exceeds the quantity demanded.
B)  quantity demanded exceeds the quantity supplied.
C)  a surplus of rental units will result.
D)  all poor people will be helped.

Question 18

A price ceiling on a good often results in:

Accepted Answer

A)  a black market,or underground transactions of the good.
B)  a surplus of the product.
C)  more communication between buyers and sellers about the appropriate price.
D)  a more efficient allocation of the good to buyers.

Question 19

When price controls take the form of maximum prices set below the equilibrium price,they are:

Accepted Answer

A)  illegal.
B)  equal to the demand price.
C)  price floors.
D)  price ceilings.

Question 20

If the demand curve for clams is downward sloping,a quota that is set below the equilibrium quantity will result in a demand price that is lower than the equilibrium price.

Accepted Answer

A) True 
 B)False

Exam 5: Price Controls and Quotas: Meddling With Markets

A binding price ceiling is usually designed to:

Correct Answer
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Rent controls set a price ceiling below the equilibrium price,and therefore:

Correct Answer
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Price controls encourage black markets because:

Correct Answer
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The persistent unwanted surplus that results from a binding price floor causes inefficiencies that do NOT include:

Correct Answer
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A price ceiling benefits all consumers.

Correct Answer
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If the demand curve for clams is downward sloping,a quota that is set below the equilibrium quantity will result in a demand price that is lower than the equilibrium price.

Correct Answer
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Correct Answer
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Use the following to answer question: -(Table: Market for Apartments) Use Table: Market for Apartments.If a price ceiling of $700 is imposed on this market,the result will be an inefficiency in the form of a _____ million apartments.

Correct Answer
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Producers may supply a good with inefficiently high quality if the government imposes a:

Correct Answer
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One of the consequences of the minimum wage has been:

Correct Answer
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Correct Answer
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Use the following to answer question: -(Figure: Rent Controls) Use Figure: Rent Controls.Without rent controls,the equilibrium quantity is:

Correct Answer
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When price controls take the form of maximum prices set below the equilibrium price,they are:

Correct Answer
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Critics of the pharmaceutical industry often argue that price ceilings should be imposed on drug manufacturers.If this happened,the quality of drugs would improve.

Correct Answer
verified

A price ceiling on a good often results in:

Correct Answer
verified

Use the following to answer question: -(Figure: The Market for Economics Textbooks) Use Figure: The Market for Economics Textbooks.At a price ceiling of $40,the market outcome would be a _ of _ textbooks.

Correct Answer
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The purpose of medallions issued in New York City in the 1930s was to:

Correct Answer
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Use the following to answer question: -(Figure: Price Controls) Use Figure: Price Controls.A price floor has been set at point b.The area of deadweight loss that results from this price floor is:

Correct Answer
verified

A binding price floor causes:

Correct Answer
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A binding price floor is likely to cause deadweight loss because:

Correct Answer
verified

Exam 5: Price Controls and Quotas: Meddling With Markets

A binding price ceiling is usually designed to:

Correct AnswerverifiedShow Answer

Rent controls set a price ceiling below the equilibrium price,and therefore:

Correct AnswerverifiedShow Answer

Price controls encourage black markets because:

Correct AnswerverifiedShow Answer

The persistent unwanted surplus that results from a binding price floor causes inefficiencies that do NOT include:

Correct AnswerverifiedShow Answer

A price ceiling benefits all consumers.

Correct AnswerverifiedShow Answer

If the demand curve for clams is downward sloping,a quota that is set below the equilibrium quantity will result in a demand price that is lower than the equilibrium price.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Use the following to answer question: -(Table: Market for Apartments) Use Table: Market for Apartments.If a price ceiling of $700 is imposed on this market,the result will be an inefficiency in the form of a _____ million apartments.

Correct AnswerverifiedShow Answer

Producers may supply a good with inefficiently high quality if the government imposes a:

Correct AnswerverifiedShow Answer

One of the consequences of the minimum wage has been:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Use the following to answer question: -(Figure: Rent Controls) Use Figure: Rent Controls.Without rent controls,the equilibrium quantity is:

Correct AnswerverifiedShow Answer

When price controls take the form of maximum prices set below the equilibrium price,they are:

Correct AnswerverifiedShow Answer

Critics of the pharmaceutical industry often argue that price ceilings should be imposed on drug manufacturers.If this happened,the quality of drugs would improve.

Correct AnswerverifiedShow Answer

A price ceiling on a good often results in:

Correct AnswerverifiedShow Answer

Use the following to answer question: -(Figure: The Market for Economics Textbooks) Use Figure: The Market for Economics Textbooks.At a price ceiling of $40,the market outcome would be a _____ of _____ textbooks.

Correct AnswerverifiedShow Answer

The purpose of medallions issued in New York City in the 1930s was to:

Correct AnswerverifiedShow Answer

Use the following to answer question: -(Figure: Price Controls) Use Figure: Price Controls.A price floor has been set at point b.The area of deadweight loss that results from this price floor is:

Correct AnswerverifiedShow Answer

A binding price floor causes:

Correct AnswerverifiedShow Answer

A binding price floor is likely to cause deadweight loss because:

Correct AnswerverifiedShow Answer

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Use the following to answer question: -(Figure: The Market for Economics Textbooks) Use Figure: The Market for Economics Textbooks.At a price ceiling of $40,the market outcome would be a _ of _ textbooks.

Correct Answer
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