Exam 4: Extensions of Demand and Supply Analysis

In a freely operating market system, queuing is most likely to occur when

When the government sets a price floor which is below the equilibrium price

In the United States, government-imposed price supports are most often associated with

The long-run effect of rent control on an area includes

In the housing market, rents serve the purpose of

If the government imposes a price floor that is higher than the market clearing price, then

Individuals who specialize in activities that lower transaction costs are

Suppose you observe that the price of a good increases and that the quantity of this good sold also increases. If only the demand curve or the supply curve shifts this suggests that

All of the following are methods of rationing goods EXCEPT

An import quota

-Refer to the above figure. If the government imposes a price floor of $60

Market clearing prices in a market system act as

A market in which a price-controlled good is sold at an illegally high price is known as

Assume that CDs are a normal good and that the price of stereo equipment falls while the labor costs of producing CDs increase. What will happen in the market for CDs?

Using a graph, show a market equilibrium. Suppose the costs of inputs increase. How is this shown on the graph? Explain what is happening in the market.

Suppose the price of lumber decreases. In the market for new homes, we would expect which of the following to occur?

Rent controls are

When a government increases an effective price ceiling for a product

If Niki is willing to pay up to $5 for an ice-cream bar but she actually pays $2 for it. The consumer surplus of the ice-cream bar for Niki

Price controls