Exam 5: Price Controls and Quotas: Meddling With Markets

Use the following to answer questions: Figure: The Shrimp Market -(Figure: The Shrimp Market) Look at the figure The Shrimp Market. If the government imposes a quota limiting sales of shrimp to 500 pounds, the quota rent per pound is:

In Europe the minimum wage has led to:

Suppose Congress imposes a price ceiling of $5 per ATM transaction. If the average market-clearing price for an ATM transaction is $2, the price ceiling will not be binding in this instance.

A limit on the amount of a foreign currency people are allowed to buy is an example of a quota.

One of the consequences of the minimum wage has been:

A binding rent-control price ceiling results in all of the following EXCEPT:

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

Use the following to answer questions: Figure: Rent Controls -(Figure: Rent Controls) Look at the figure Rent Controls. Suppose that rent controls are imposed. If the government wanted a rent control ceiling to be effective immediately, what is one possible price to set?

Which of the following is an example of a price floor?

A price ceiling is not effective if:

A quota is:

Hugo Chávez was the president of Venezuela. Venezuela is a major producer of oil products, which remain the keystone 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 percent of the previous price. This policy is called a:

Use the following to answer question: Figure: The Market for Tortillas -(Figure: The Market for Tortillas) Look at the figure The Market for Tortillas. With a nonbinding price floor, the price could be equal to _____, consumers would demand _____, and producers would supply _____.

A price floor is likely to cause deadweight loss because:

The most likely reason that the government implements a _____ is because it feels the price is too high for _____.

How could a minimum wage cause an incentive for illegal hiring practices?

Quotas often:

Which of the following is a likely outcome of price controls and quota limits?

A price ceiling is:

The quota rent is the same thing as deadweight loss.