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Exam 4: Using Supply and Demand

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Question 111

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Which of the below is true?

A) A price ceiling reduces the quantity exchanged on the market, but a price floor increases the quantity exchanged on the market.
B) A price ceiling increases the quantity exchanged on the market, but a price floor decreases the quantity exchanged on the market.
C) Both price floors and price ceilings reduce the quantity exchanged in the market.
D) Both price floors and price ceilings increase the quantity exchanged in the market.

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Question 112

Multiple Choice

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If a good has a perfectly inelastic short-run supply curve, an increase in demand will:

A) increase the price and quantity exchanged in the short run.
B) increase the price and but leave the quantity exchanged the same in the short run.
C) increase the quantity exchanged but leave the price the same in the short run.
D) leave both price and quantity exchanged the same in the short run.

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Question 113

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Exhibit 4-A -Refer to Exhibit 4-A.Elasticity varies along a linear demand curve.Graph B represents the section of the curve where:

Which of the following is not a result of rent controls?

Exhibit 4-C -Refer to Exhibit 4-C.Graph B represents a demand curve that is relatively ____.Total revenue ____ as the price decreases from $10 to $5.

To the extent that a governmental price control succeeds in affecting price, it can be expected to lead to a corresponding:

A tax is imposed on orange juice.Consumers will bear the full burden of this tax if the:

Whenever a price ceiling is imposed in a market, it is true that:

Figure 4-D -Refer to Figure 4-D.When the price is P₁, the consumer surplus is equal to the area:

The area between the market price and the supply curve provides a measure of:

A perfectly elastic supply curve is:

Figure 4-A The diagram below represents the market for butter. -Refer to Figure 4-A.If a price ceiling of $4 is imposed, we would expect that ____ units of butter will be sold.

Based on the graph below, what is the consumer surplus of the 10^th unit bought/sold?

Table 4-D Miles demands jazz CDs according to the following demand schedule: $\begin{array} { c c } \text { Price af jazz CDs } & \text { Qurantity of jazz CDs } \\\$ 30 & 1 \\\$ 25 & 2 \\\$ 20 & 3 \\\$ 15 & 4 \\\$ 10 & 5\end{array}$ -Refer to Table 4-D.If the price of jazz CDs equals $20, the consumer surplus Miles receives from purchasing jazz CDs is:

If the supply curve is perfectly elastic, then an increase in demand will:

Figure 4-C -Refer to Figure 4-C.If the market price equals P₂, producer surplus can be identified in the diagram as area:

Gains from trade are measured by:

Which of the following is not likely to result from an increase in the federal minimum wage?

If the measured elasticity of supply coefficient equals 0.6, then supply is:

If the demand is perfectly elastic, what would happen to the quantity demanded if there is a tiny increase in price?