Exam 5: Price Controls and Quotas: Meddling With Markets

Use the following to answer question: -(Table: Market for Apartments)Use Table: Market for Apartments.If a government price ceiling of $600 is imposed on this market,the result will be an inefficiency in the form of a _____ million apartments.

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

A maximum price set below the equilibrium price is a:

If the demand curve for clams is downward sloping and the supply curve is upward sloping,a quota that is set above the equilibrium quantity will have no immediate effect on the market.

The demand price of a given quantity of doughnuts is the price at which consumers will demand that quantity.The supply price for a given quantity is the price at which doughnut producers will supply that quantity.

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

The government decides to impose a price ceiling on a good because it thinks the market-determined price is too high.If it imposes the price ceiling above the equilibrium price:

Use the following to answer question: -(Figure: The Market for Sandwiches)Use Figure: The Market for Sandwiches.Suppose a price floor is set at $7.At this price,consumer surplus is equal to _____ and producer surplus is equal to _____.

Use the following to answer question: -(Table: Quantity Supplied and Quantity Demanded)Use Table: Quantity Supplied and Quantity Demanded.A price floor equal to _____ would produce excess supply in this market.

Use the following to answer question: -(Table: The Market for Soda)Use Table: The Market for Soda.If the government imposes a price ceiling of $0.50 per can of soda,the quantity of soda demanded will be _____ cans.

A quota is a:

Use the following to answer question: -(Table: Market for Fried Twinkies)Use Table: Market for Fried Twinkies.Suppose the government decides to reduce fried Twinkie consumption as part of a war on obesity.After careful study,the government decides to impose a quota of 5,000 on production of fried Twinkies this year.What price will producers charge if they obey the quota law?

Use the following to answer question: -(Figure: Rent Controls)Use Figure: Rent Controls.Suppose that rent controls are imposed.If the government wanted a rent control ceiling to be effective immediately,what is one possible price to set?

(Figure: The Market for Tortillas)Use Figure: The Market for Tortillas.With a nonbinding price floor,the price could be equal to _____,consumers would demand _____,and producers would supply _____.

Assuming that U.S.and French wines are substitutes in consumption,if the U.S.government imposes a quota on the amount of French wine allowed into the United States and the quota is set at a quantity below equilibrium,the price of French wine in the United States will _____ while the price of the U.S.-produced wine will _____.

The difference between the demand price and the supply price at the quota limit amount is the:

To be binding,a price floor must be set:

Hugo Chávez was the president of Venezuela.Venezuela is a major producer of oil products,which remain a critical component of Venezuela's economy.Suppose President Chávez wanted to increase his popularity with the citizens of Venezuela and enacted a government policy to reduce the price of gasoline sold at state-owned gas stations to 50% of the previous price.Assuming a downward-sloping demand curve for gasoline,in theory,this policy would result in a quantity of gasoline demanded that is _____ the quantity of gasoline supplied.

Farmers in developing countries want the United States to reduce the subsidies that it gives to U.S.farmers because subsidized agricultural products from the United States:

Use the following to answer question: -(Figure: The Market for Sandwiches)Use Figure: The Market for Sandwiches.How much total surplus would be lost if there were a quota of eight sandwiches that could be legally exchanged?