Exam 5: Price Controls and Quotas: Meddling With Markets

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.

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

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.

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:

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.

A price ceiling benefits all consumers.

One of the consequences of the minimum wage has been:

(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 _____.

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.

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

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

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

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

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

Price controls encourage black markets because:

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.

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

A binding price floor causes:

A binding price ceiling is usually designed to:

A price ceiling on a good often results in: