Exam 4: Prices Free Controlled and Relative

If the absolute price of a new car is $30,000 and the relative price of a laptop computer in terms of cars is 1/30 of a car, it follows that the absolute price of the laptop is

Which of the following is true?

Exhibit 4-7 -Refer to Exhibit 4-7. How many fewer persons work in the unskilled labor market at the minimum wage (W_M) than at the equilibrium wage (W₁)?

Exhibit 4-7 -Refer to Exhibit 4-7. How many unskilled workers do firms want to employ at the minimum wage?

Exhibit 4-2 -Exhibit 4-2 represents the orange juice market. The horizontal line represents a price ceiling imposed by the government. Which of the following is true?

One of the effects of a price floor (set above equilibrium price) is

It is possible for the absolute price of a good to rise at the same time that the good's relative price is falling.

Exhibit 4-8 -Refer to Exhibit 4-8. Suppose that wheat producers lobby the government for a price floor and receive one. This price floor is set at P_F. What has happened to the consumers' surplus as a result of the imposition of the price floor?

Suppose that the price of butter is $3 per pound and the price of margarine is $2 per pound. If the price of butter rises to $3.90 and the price of margarine rises to $2.20, then the absolute price of butter has _______________ and the relative price of butter has _______________.

There are two goods in the economy, apples and bread. The relative price of apples has increased. This could be due to

Exhibit 4-8 -Refer to Exhibit 4-8. Suppose that wheat producers lobby the government for a price floor and receive one. This price floor is set at P_F. What is the size of the producers' surplus at P_F?

Exhibit 4-1 -Refer to Exhibit 4-1. Suppose the good shown is being sold at the $6 price ceiling. At a quantity of 75 units, what is the maximum per-unit price buyers would be willing to pay for a good "tied" to the good shown in the exhibit?

A shortage of kidneys (for transplants) results from

Exhibit 4-3 -Refer to Exhibit 4-3. If price P₁ is a price ceiling, then

Exhibit 4-9 -Refer to Exhibit 4-9. Suppose that the government imposes a price ceiling at a price of $15. The number of units that would be exchanged in this market would be

A rationing device is needed because scarcity exists.

List and describe the two major jobs performed by price.

What condition is necessary for a price floor to have an impact on a market? Describe two effects that a price floor can have on a market.

Exhibit 4-6 -Refer to Exhibit 4-6. Suppose the minimum wage is set at $7. The result will be

Suppose that the government sets a price floor in the market for milk at $2.15 per gallon of milk. If the equilibrium price of milk is $1.99, the result of the price floor will be a _____________ of milk and ____________ exchanges will be made with the price floor than would be made in a free market.