Exam 4: Price Controls and Quotas: Meddling With Markets

Use the following to answer questions: -(Table: The Market for Taxi Rides) Use Table: The Market for Taxi Rides. If a government quota limit at 6 million rides is imposed, the quota rent accruing to the owner of a taxi medallion will be _____ per ride, but there will be a total missed opportunity (inefficiency) to consumers and producers of _____ million rides.

(Figure: The Market for Hybrid Cars) Use Figure: The Market for Hybrid Cars. If there were a binding price ceiling in the market for hybrid cars, one possible price would be equal to _____; consumers would demand _____; and producers would supply _____.

Use the following to answer questions: -(Table: Market for Apartments) Use Table: Market for Apartments. If a price ceiling of $900 is imposed on this market, the result will be an inefficiency in the form of a _____ million apartments.

A maximum price set below the equilibrium price is a:

Use the following to answer questions: -(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:

The amount for which suppliers are willing to supply the quota limit quantity is the:

If New York City had no medallion system for taxicabs, assuming that the supply curve of taxicab rides is upward sloping and the demand curve for taxicab rides is downward sloping, economic theory would predict that the price of a taxicab ride would:

Suppose the government of the oil-rich country Saudi Arabia sets gasoline prices at $0.25 per gallon when the market price is $1.50. The Saudi government's actions will:

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

A student organization forms on your college campus to protest the high rent for apartments near campus. This organization is planning a meeting with the dean and the president of the college. Which choice BEST describes one policy the student organization might fight for?

Economic models predict that a binding minimum wage will generally cause increased unemployment for low-skilled workers.

Governments continue to impose price controls. Which statement is NOT a valid reason for this?

A quota is the minimum amount of some good that can be bought and sold in the market.

Use the following to answer question 72: -(Table: The Market for Soda) Use Table: The Market for Soda. If the government imposes a price floor of $1 per can of soda, there will be:

If the government sets out to help low-income people by establishing a maximum amount that can be paid for rent:

The American Medical Association licenses doctors. This licensing has probably led to lower earnings for doctors over time.

(Figure: Quantity Controls) Use Figure: Quantity Controls. If the government decides to restrict the quantity sold to 100, which statement is FALSE?

In economic markets, a quota is a(n):

West African cotton farmers are very upset about the subsidies the U.S. government pays to American cotton farmers. One reason for this could be that subsidized cotton from the United States:

The most likely reason that the government would implement a _____ is because it feels that the price is too low for _____.