Exam 4: Extensions of Demand and Supply Analysis

A price floor above the market clearing price typically results in I. an excess quantity supplied II. a shortage III. an excess quantity demand

Garbanzo Beans -Consider the above table. Assuming the government imposes a price ceiling on garbanzo beans of $4, what would be the likely result?

A minimum wage is an example of a

Garbanzo Beans -When the government establishes a minimum price for an agricultural product above the equilibrium price, the government is creating a(n)

Rationing goods on the basis of price is a direct result of

Price controls often generate

In the automobile industry, workers have just negotiated a new contract giving workers a large raise. There has also been an increase in the number of licensed drivers who are in the market for a new car. In the market for new automobiles, the effects that these changes will have on the equilibrium price and quantity are:

Price ceilings set below the equilibrium price cause

Suppose local educators argue that teachers' salaries are too low. At the same time it is said that the school district received 750 applications for 5 new openings. Are salaries too low? Explain.

Suppose we observe the following two simultaneous events in the market for beef. First, there is a decrease in the demand for beef due to changes in consumer tastes. And second, there is a reduction in supply due to cattle farmers selling their land to real estate developers. We know with certainty that these two simultaneous events will cause which of the following?

The market system is also called the price system because

Firms that produce 80 percent of all computer chips have shut down their facilities for maintenance. In the computer chip market this will lead to

A decrease in demand and a decrease in supply will lead to

As compared to the market clearing price, the total amount of consumer surplus and producer surplus is

Minimum wages are examples of

In some developing countries and in some former Communist countries ,people exchange their domestic currencies for foreign currencies such as the dollar in black markets. Why would this practice go on?

When the government sets a price floor which is above the equilibrium price,

-Refer to the above figure. If the government set a price floor of $3.50 per gallon, there would be

We cannot predict the effect on the equilibrium quantity, but know that the market clearing price will decrease when

Instituting a rent control program will most likely lead to