Exam 4: Price Controls and Quotas: Meddling With Markets

(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 _____.

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

To be binding, a price ceiling must be set at a price _____ the equilibrium price.

Which statement about the undesirable side effects of a quantity control is NOT correct?

Producers will sometimes lower the quality of a good when the government imposes:

Use the following to answer questions: -(Figure: The Market for Hybrid Cars) Use Figure: The Market for Hybrid Cars. What area represents deadweight loss if there is a binding price floor at P₁?

Use the following to answer questions: -(Figure: Supply and Demand) Use Figure: Supply and Demand. A price ceiling of P₃ causes:

One of the consequences of the minimum wage has been:

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

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

To be binding, a price floor must be set:

Theoretically, the quota rent for a New York taxicab owner is equal to the market price of the license that allows him to drive the cab.

A minimum price set above the equilibrium price is a:

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. This policy is called a:

The market for apples is in equilibrium at a price of $0.50 per pound. If the government imposes a price floor in the market at a price of $0.40 per pound:

The market for salmon is in equilibrium. A binding price ceiling, a binding price floor, and a quota limit below the market equilibrium in this market would all cause:

Quantity controls usually take the form of price ceilings or price floors established by the government.

A minimum price that the government guarantees farmers will receive for a particular crop is a(n):

Price controls are always set below the market equilibrium price.

A binding price floor is a _____ price set _____ the equilibrium price.