Exam 10: Using the Competitive Model

Use the following figure to answer the questions : Figure 10-2 :shows the intersection of demand and supply at the price P₂ and quantity Q₂ in a competitive market. -Refer to Figure 10-2.What is the deadweight loss if a price ceiling is imposed at the price level P₃ in this market?

A given per-unit excise tax will increase the short run product price by the highest amount when:

In which of the following cases is it likely that the entire U.S.domestic demand for corn is met through imports?

Use the following figure to answer the questions : Figure 10-5 shows the domestic U.S.market for bananas and the global market for bananas.The domestic supply curve is given by SUPPLY_US.With free trade,the equilibrium output in the U.S.market is Q.The import quota imposed by the government is equal to 0A. -Which of the following correctly identifies the effect of an import quota on a good?

Suppose the government limits the number of cabs that can operate in the city by issuing a limited number of medallions.Later,if the government decides to regulate fares instead and sets them below current levels:

What would be the welfare effect of a per-unit tax in the following markets? a)The market for cigarettes b)The market for cashmere scarves

Restrictions on entry in the taxicab market tends to benefit _____ the most.

Use the following figure to answer the questions : Figure 10-3 : shows the demand and supply for a commodity in the domestic U.S.market as well as the global market.The commodity is imported from the rest of the world to the U.S.market. -Refer to Figure 10-3.The total consumer surplus prior to trade was _____.

Use the following figure to answer the questions : Figure 10-3 : shows the demand and supply for a commodity in the domestic U.S.market as well as the global market.The commodity is imported from the rest of the world to the U.S.market. -In Figure 10-3,the net gain to the U.S.from trade is _____.

What is meant by a deadweight loss?

The following figure shows the demand and supply for a commodity in the domestic U.S.market as well as the global market.The commodity is imported from the rest of the world to the U.S.market. Refer to Figure 10-3.In the absence of trade,the equilibrium price in the U.S.market is _____.

Although U.S.airline fares fell significantly after deregulation,profits did not fall.This was because:

Use the following figure to answer the questions : Figure 10-4 : shows the intersection of the demand and supply curves for a commodity in the domestic market at price P₂ and quantity Q₂,in the absence of trade.With trade,the supply curve shifts to Supply_trade. -Refer to Figure 10-4.The net gain to domestic residents when they trade with foreign suppliers is represented by _____.

Suppose there is a city which licenses cabs,but cab owners find they cannot get anyone to buy their medallions at any price.You can conclude that:

Which of the following is true of international trade?

In 2002,the U.S.imposed higher tariffs on steel imports to save American jobs.However,the 30 percent increase in tariffs on steel imports imposed a net job loss on the U.S.in part because:

In 2002,the U.S.imposed higher tariffs on steel imports to save American jobs.How did these tariffs reduce U.S exports?

Suppose a city limits the number of cabs that can provide taxi service by issuing medallions. If the medallions can be bought and sold and they command a positive price,you can conclude that:

Rent controls in the rental housing market:

When the U.S.airline industry was regulated by the Civil Aeronautics Board (CAB). ,airline workers' unions: