Question 1

What would you expect the consequences to size and quality would be for a product sold under a binding price ceiling?

Accepted Answer

A)  Both the quality and the size of the product will decrease.
B)  The quality of the product will increase but the size of the product will decrease.
C)  Both the quality and the size of the product will increase.
D)  The quality of the product will decrease but the size of the product will increase.
E)  Neither the quality nor the size of the product will be affected.

Question 2

You would expect there to be many customers for a black market good when the opportunity cost of finding the good under a:

Accepted Answer

A)  binding price floor is high.
B)  binding price floor is low.
C)  nonbinding price ceiling is high.
D)  binding price ceiling is low.
E)  binding price ceiling is high.

Question 3

As the time frame shifts from the short run to the long run,what happens to consumers who are subject to a binding price floor?

Accepted Answer

A)  They are increasingly willing to substitute away from the good,and the demand curve becomes less elastic.
B)  There are no changes,and elasticity remains unchanged.
C)  They are less willing to substitute away from the good,and the demand curve becomes less elastic.
D)  They are increasingly willing to substitute away from the good,and the demand curve becomes more elastic.
E)  They are less willing to substitute away from the good,and the demand curve becomes more elastic.

Question 4

If a store sells a good at the market price,even though the government authorities have set the minimum price that can be charged,the store is selling the good in a(n) :

Accepted Answer

A)  black market for a market price that is higher.
B)  black market for a market price that is lower.
C)  effort to eliminate a surplus of the good.
D)  legal market for a market price that is higher.
E)  legal market for a market price that is lower.

Question 5

Use the following information to answer the questions that follow.
Market for a new hardcover book:
Demand: Qd = 325 - 8 P
Supply: Qs = -60 + 3 P
-What would be the equilibrium price for hardcover books?

Accepted Answer

A)  $100
B)  $45
C)  $385
D)  $35
E)  $11

Question 6

Use the following table to answer the questions that follow.
 
-If the price floor for corn is set at $5.00,what amount and type of disequilibrium will be present in the market for corn?

Accepted Answer

A)  There will be no shortage or surplus.
B)  There will be a shortage of 103,000.
C)  There will be a surplus of 103,000.
D)  There will be a surplus of 223,000.
E)  There will be a surplus of 120,000.

Question 7

Why does a shortage that occurs under a binding price ceiling decrease over time?

Accepted Answer

A)  Demand becomes more elastic.
B)  Demand becomes more inelastic.
C)  Demand and supply both become more elastic.
D)  Demand and supply both become more inelastic.
E)  Demand becomes more elastic,but supply becomes more inelastic.

Question 8

Use the following information to answer the questions that follow.Market for flat-screen TVs:
Demand: Qd = 2,600 - 5 P
Supply: Qs = -1,000 + 10 P
-What would be the quantity demanded if a price ceiling is set at $400?

Accepted Answer

A)  600
B)  240
C)  0
D)  3,000
E)  2,400

Question 9

Refer to the accompanying figure to answer the questions that follow.
 1 is imposed,by how much would the quantity supplied change? A) It would increase by 32,000 units. B) It would decrease by 18,000 units. C) It would decrease by 30,500 units. D) It would decrease by 30,000 units. E) It would decrease by 32,000 units." class="answers-bank-image d-inline" rel="preload" >
-The market is currently at market equilibrium.If a binding price ceiling of P1 is imposed,by how much would the quantity supplied change?

Accepted Answer

A)  It would increase by 32,000 units.
B)  It would decrease by 18,000 units.
C)  It would decrease by 30,500 units.
D)  It would decrease by 30,000 units.
E)  It would decrease by 32,000 units.

Question 10

Explain why a shortage occurs in a market where a binding price ceiling exists.Does a price ceiling improve the operation of the market?

Accepted Answer

Under a binding price ceiling (a price e...

Question 11

Refer to the accompanying figure to answer the questions that follow.
 
-If there is a $60 price ceiling imposed on a textbook,what will be the disequilibrium amount?

Accepted Answer

A)  There will be a shortage of 800,000 textbooks.
B)  There will be a surplus of 800,000 textbooks.
C)  There will be neither a shortage nor a surplus.
D)  There will be a shortage of 2,600,000 textbooks.
E)  There will be a shortage of 400,000 textbooks.

Question 12

Why are binding price floor laws passed?

Accepted Answer

A)  They make goods less expensive.
B)  They make goods available to the largest number of customers.
C)  They encourage producers to produce goods in the most cost-efficient fashion.
D)  They help producers receive higher prices for products sold in the legal market.
E)  They discourage the formation of illegal black markets.

Question 13

Let's say that you have a friend who was caught illegally buying a good on the black market.When the judge asks you to describe your friend's motivation as a buyer,which of the following would most likely be your reply?

Accepted Answer

A)  My friend bought the good on the black market because a binding price floor had created a shortage in the legal market and my friend really needed the good.
B)  My friend bought the good on the black market because a price ceiling caused the price to be lower on the black market.
C)  My friend bought the good on the black market because a nonbinding price floor had created a shortage on the legal market and my friend really needed the good.
D)  My friend bought the good on the black market because a binding price floor made the good too expensive to purchase on the legal market and it was cheaper on the black market.
E)  My friend bought the good on the black market because a nonbinding price floor made the good too expensive to purchase on the legal market and it was cheaper on the black market.

Question 14

Use the following information to answer the questions that follow.Market for a new hardcover book:
Demand: Qd = 325 - 8 P
Supply: Qs = -60 + 3 P
-Which of the following is an accurate statement about the consequence of nonbinding price ceilings?

Accepted Answer

A)  They prevent the seller from receiving the equilibrium price.
B)  They require the seller to advertise the product at the equilibrium price.
C)  They create a surplus in the legal market.
D)  They do not change the quantity of goods bought or sold in the legal market.
E)  They increase the quantity demanded of the good in question.

Exam 5: Price Controls

Let's say that you have a friend who was caught illegally buying a good on the black market.When the judge asks you to describe your friend's motivation as a buyer,which of the following would most likely be your reply?

Correct Answer
verified

Why does a shortage that occurs under a binding price ceiling decrease over time?

Correct Answer
verified

Use the following information to answer the questions that follow. Market for a new hardcover book: Demand: Q_d = 325 - 8 P Supply: Q_s = -60 + 3 P -What would be the equilibrium price for hardcover books?

Correct Answer
verified

Use the following table to answer the questions that follow. -If the price floor for corn is set at $5.00,what amount and type of disequilibrium will be present in the market for corn?

Correct Answer
verified

Use the following information to answer the questions that follow.Market for flat-screen TVs: Demand: Q_d = 2,600 - 5 P Supply: Q_s = -1,000 + 10 P -What would be the quantity demanded if a price ceiling is set at $400?

Correct Answer
verified

Refer to the accompanying figure to answer the questions that follow. -If there is a $60 price ceiling imposed on a textbook,what will be the disequilibrium amount?

Correct Answer
verified

Explain why a shortage occurs in a market where a binding price ceiling exists.Does a price ceiling improve the operation of the market?

Correct Answer
verified
Under a binding price ceiling (a price e...
View Answer

Refer to the accompanying figure to answer the questions that follow. -The market is currently at market equilibrium.If a binding price ceiling of P₁ is imposed,by how much would the quantity supplied change?

Correct Answer
verified

As the time frame shifts from the short run to the long run,what happens to consumers who are subject to a binding price floor?

Correct Answer
verified

You would expect there to be many customers for a black market good when the opportunity cost of finding the good under a:

Correct Answer
verified

If a store sells a good at the market price,even though the government authorities have set the minimum price that can be charged,the store is selling the good in a(n) :

Correct Answer
verified

Why are binding price floor laws passed?

Correct Answer
verified

What would you expect the consequences to size and quality would be for a product sold under a binding price ceiling?

Correct Answer
verified

Use the following information to answer the questions that follow.Market for a new hardcover book: Demand: Q_d = 325 - 8 P Supply: Q_s = -60 + 3 P -Which of the following is an accurate statement about the consequence of nonbinding price ceilings?

Correct Answer
verified

Exam 5: Price Controls

Let's say that you have a friend who was caught illegally buying a good on the black market.When the judge asks you to describe your friend's motivation as a buyer,which of the following would most likely be your reply?

Correct AnswerverifiedShow Answer

Why does a shortage that occurs under a binding price ceiling decrease over time?

Correct AnswerverifiedShow Answer

Use the following information to answer the questions that follow. Market for a new hardcover book: Demand: Qd = 325 - 8 P Supply: Qs = -60 + 3 P -What would be the equilibrium price for hardcover books?

Correct AnswerverifiedShow Answer

Use the following table to answer the questions that follow. -If the price floor for corn is set at $5.00,what amount and type of disequilibrium will be present in the market for corn?

Correct AnswerverifiedShow Answer

Use the following information to answer the questions that follow.Market for flat-screen TVs: Demand: Qd = 2,600 - 5 P Supply: Qs = -1,000 + 10 P -What would be the quantity demanded if a price ceiling is set at $400?

Correct AnswerverifiedShow Answer

Refer to the accompanying figure to answer the questions that follow. -If there is a $60 price ceiling imposed on a textbook,what will be the disequilibrium amount?

Correct AnswerverifiedShow Answer

Explain why a shortage occurs in a market where a binding price ceiling exists.Does a price ceiling improve the operation of the market?

Correct AnswerverifiedUnder a binding price ceiling (a price e...View AnswerShow Answer

Refer to the accompanying figure to answer the questions that follow. -The market is currently at market equilibrium.If a binding price ceiling of P1 is imposed,by how much would the quantity supplied change?

Correct AnswerverifiedShow Answer

As the time frame shifts from the short run to the long run,what happens to consumers who are subject to a binding price floor?

Correct AnswerverifiedShow Answer

You would expect there to be many customers for a black market good when the opportunity cost of finding the good under a:

Correct AnswerverifiedShow Answer

If a store sells a good at the market price,even though the government authorities have set the minimum price that can be charged,the store is selling the good in a(n) :

Correct AnswerverifiedShow Answer

Why are binding price floor laws passed?

Correct AnswerverifiedShow Answer

What would you expect the consequences to size and quality would be for a product sold under a binding price ceiling?

Correct AnswerverifiedShow Answer

Use the following information to answer the questions that follow.Market for a new hardcover book: Demand: Qd = 325 - 8 P Supply: Qs = -60 + 3 P -Which of the following is an accurate statement about the consequence of nonbinding price ceilings?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Use the following information to answer the questions that follow. Market for a new hardcover book: Demand: Q_d = 325 - 8 P Supply: Q_s = -60 + 3 P -What would be the equilibrium price for hardcover books?

Correct Answer
verified

Correct Answer
verified

Use the following information to answer the questions that follow.Market for flat-screen TVs: Demand: Q_d = 2,600 - 5 P Supply: Q_s = -1,000 + 10 P -What would be the quantity demanded if a price ceiling is set at $400?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Under a binding price ceiling (a price e...
View Answer

Refer to the accompanying figure to answer the questions that follow. -The market is currently at market equilibrium.If a binding price ceiling of P₁ is imposed,by how much would the quantity supplied change?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Use the following information to answer the questions that follow.Market for a new hardcover book: Demand: Q_d = 325 - 8 P Supply: Q_s = -60 + 3 P -Which of the following is an accurate statement about the consequence of nonbinding price ceilings?

Correct Answer
verified