Question 1

Theoretically,the quota rent for a New York taxicab owner is equal to the market price of the licence that allows him to drive the cab.

Accepted Answer

A) True 
 B)False  True

Question 2

Rent controls set a price ceiling below the equilibrium price,and therefore:

Accepted Answer

A)  quantity supplied exceeds the quantity demanded. 
B)  quantity demanded exceeds the quantity supplied. 
C)  a surplus of rental units will result. 
D)  all poor people will be helped. 
A)  quantity supplied exceeds the quantity demanded. 
B)  quantity demanded exceeds the quantity supplied. 
C)  a surplus of rental units will result. 
D)  all poor people will be helped. B

Question 3

Use the following to answer question 
Figure: The Shrimp Market  
-If the minimum wage is a binding price floor:

Accepted Answer

A)  those who want to work will outnumber the jobs available. 
B)  the market-clearing equilibrium wage will increase. 
C)  there will be a job for everyone who is willing to work. 
D)  business owners will hire more workers. 
A)  those who want to work will outnumber the jobs available. 
B)  the market-clearing equilibrium wage will increase. 
C)  there will be a job for everyone who is willing to work. 
D)  business owners will hire more workers. A

Question 4

Use the following to answer questions:
Table: The Market for Taxi Rides  
-(Table: The Market for Taxi Rides)Use Table: The Market for Taxi Rides.If a government quota limit at 6 million rides is imposed,the quota rent accruing to the owner of a taxi licence will be _____ per ride,but there will be a total missed opportunity (inefficiency)to consumers and producers of _____ million rides.

Accepted Answer

A)  $1;1 
B)  $2;2 
C)  $3;3 
D)  $4;4 
A)  $1;1 
B)  $2;2 
C)  $3;3 
D)  $4;4

Question 5

When the government policy is to regulate the quantity of a good that can be bought and sold rather than the price at which it is transacted,it uses a:

Accepted Answer

A)  quota. 
B)  price control. 
C)  price ceiling. 
D)  price floor. 
A)  quota. 
B)  price control. 
C)  price ceiling. 
D)  price floor.

Question 6

If a quota is set above the equilibrium quantity,there will be:

Accepted Answer

A)  incentives for illegal activities. 
B)  missed opportunities in the form of mutually beneficial transactions that don't occur. 
C)  a supply price for the quantity transacted that exceeds the demand price of the quantity transacted. 
D)  no immediate effect. 
A)  incentives for illegal activities. 
B)  missed opportunities in the form of mutually beneficial transactions that don't occur. 
C)  a supply price for the quantity transacted that exceeds the demand price of the quantity transacted. 
D)  no immediate effect.

Question 7

Use the following to answer questions:
Table: The Market for Taxi Rides  
-(Table: The Market for Taxi Rides)Use Table: The Market for Taxi Rides.If a government quota limit at 9 million rides is imposed,the quota rent that will accrue to the owner of a taxi licence will be _____ per ride,but there will be a total missed opportunity (inefficiency)to consumers and producers of _____ million rides.

Accepted Answer

A)  $1;1 
B)  $2;2 
C)  $3;3 
D)  $4;4 
A)  $1;1 
B)  $2;2 
C)  $3;3 
D)  $4;4

Question 8

Which inefficiency is NOT caused by binding price ceilings?

Accepted Answer

A)  inefficient allocation to consumers 
B)  wasted resources 
C)  potential illegal activity 
D)  inefficient allocation of sales among sellers 
A)  inefficient allocation to consumers 
B)  wasted resources 
C)  potential illegal activity 
D)  inefficient allocation of sales among sellers

Question 9

In 1998,the city of Toronto decided to introduce a new class of taxi licence with the sale of 1 400 new Ambassador Taxi licences.Unlike a standard licence,Ambassador Licences can't be sold,leased,or otherwise transferred,and the licence remains the property of the city.The aim was to allow these drivers to be entrepreneurs who__________

Accepted Answer

A)  limit the number of taxi rides during rush hour. 
B)  cared about the quality of their car. 
C)  give the owner the right to be part-time UBER drivers. 
D)  encourage citizens to buy their own cars. 
A)  limit the number of taxi rides during rush hour. 
B)  cared about the quality of their car. 
C)  give the owner the right to be part-time UBER drivers. 
D)  encourage citizens to buy their own cars.

Question 10

Use the following to answer questions:  
-(Figure: Rent Controls)Use Figure: Rent Controls.If rent controls are set at Rent0,renters would be willing to pay a price at least as high as:

Accepted Answer

A)  Rent4 for Q0 units. 
B)  Rent4 for Q1 units. 
C)  Rent3 for Q1 units. 
D)  No one would be willing to pay a higher actual price than Rent0. 
A)  Rent4 for Q0 units. 
B)  Rent4 for Q1 units. 
C)  Rent3 for Q1 units. 
D)  No one would be willing to pay a higher actual price than Rent0.

Question 11

Use the following to answer question 
Figure: The Market for Clams  
-(Figure: The Market for Clams)Use Figure: The Market for Clams.The government imposes a quota limiting sales of clams to 1 000 kilograms.According to the figure,the quota rent per kilogram in this case is:

Accepted Answer

A)  $7.50. 
B)  $5.00. 
C)  $2.50. 
D)  The quota rent cannot be determined from the information provided. 
A)  $7.50. 
B)  $5.00. 
C)  $2.50. 
D)  The quota rent cannot be determined from the information provided.

Question 12

Use the following to answer questions:  
-(Figure: Price Controls)Use Figure: Price Controls.An effective price floor would be at price _____ and a _____ would result from the difference between points _____.

Accepted Answer

A)  c;surplus;f and e 
B)  b;surplus;f and e 
C)  d;shortage;i and h 
D)  b;shortage;f and e 
A)  c;surplus;f and e 
B)  b;surplus;f and e 
C)  d;shortage;i and h 
D)  b;shortage;f and e

Question 13

In economic markets,a quota is a(n):

Accepted Answer

A)  lower limit on quantity. 
B)  upper limit on quantity. 
C)  maximum price. 
D)  minimum price. 
A)  lower limit on quantity. 
B)  upper limit on quantity. 
C)  maximum price. 
D)  minimum price.

Question 14

An effective minimum wage ultimately means that:

Accepted Answer

A)  some unskilled workers have a difficult time finding a job. 
B)  employers must encourage workers to apply for positions. 
C)  employers will have difficulty finding enough workers for their positions. 
D)  workers are generally guaranteed employment. 
A)  some unskilled workers have a difficult time finding a job. 
B)  employers must encourage workers to apply for positions. 
C)  employers will have difficulty finding enough workers for their positions. 
D)  workers are generally guaranteed employment.

Question 15

Use the following to answer question 
Figure: The Shrimp Market  
-(Figure: The Shrimp Market)Use Figure: The Shrimp Market.If the government wants to limit shrimp sales to 500 kilograms,it can impose a price:

Accepted Answer

A)  floor of $20. 
B)  floor of $10. 
C)  ceiling of $5. 
D)  floor of $15. 
A)  floor of $20. 
B)  floor of $10. 
C)  ceiling of $5. 
D)  floor of $15.

Question 16

Use the following to answer questions:  
-(Table: The Market for Pop)Use Table: The Market for Pop.If the government imposes a price ceiling of $1 per can of pop,the quantity of pop supplied will be _____ cans.

Accepted Answer

A)  7 
B)  8 
C)  9 
D)  10 
A)  7 
B)  8 
C)  9 
D)  10

Question 17

Use the following to answer questions:  
-(Figure: Supply and Demand in Agriculture)Use Figure: Supply and Demand in Agriculture.If a price floor at P4 is set to help improve farm incomes and the government wants to assure farmers that their output will be purchased,the government must purchase an amount of output equal to:

Accepted Answer

A)  Q3-Q0. 
B)  Q3-Q1. 
C)  Q2-Q1. 
D)  Q1-Q3. 
A)  Q3-Q0. 
B)  Q3-Q1. 
C)  Q2-Q1. 
D)  Q1-Q3.

Question 18

Use the following to answer questions:  
-(Table: Quantity Supplied and Quantity Demanded)Use Table: Quantity Supplied and Quantity Demanded.A government-imposed price ceiling equal to $5 would result in:

Accepted Answer

A)  the equilibrium quantity being bought and sold in this market. 
B)  excess demand. 
C)  excess supply. 
D)  a surplus occurring in this market. 
A)  the equilibrium quantity being bought and sold in this market. 
B)  excess demand. 
C)  excess supply. 
D)  a surplus occurring in this market.

Question 19

Price controls encourage black markets because:

Accepted Answer

A)  they eliminate opportunity costs. 
B)  individuals can profit by illegal exchanges. 
C)  they create too much efficiency. 
D)  they create too much equity. 
A)  they eliminate opportunity costs. 
B)  individuals can profit by illegal exchanges. 
C)  they create too much efficiency. 
D)  they create too much equity.

Question 20

A price ceiling on a good often results in:

Accepted Answer

A)  a black market,or underground transactions of the good. 
B)  a surplus of the product. 
C)  more communication between buyers and sellers about the appropriate price. 
D)  a more efficient allocation of the good to buyers. 
A)  a black market,or underground transactions of the good. 
B)  a surplus of the product. 
C)  more communication between buyers and sellers about the appropriate price. 
D)  a more efficient allocation of the good to buyers.

Theoretically,the quota rent for a New York taxicab owner is equal to the market price of the licence that allows him to drive the cab.

Rent controls set a price ceiling below the equilibrium price,and therefore:

Use the following to answer question Figure: The Shrimp Market -If the minimum wage is a binding price floor:

When the government policy is to regulate the quantity of a good that can be bought and sold rather than the price at which it is transacted,it uses a:

If a quota is set above the equilibrium quantity,there will be:

Which inefficiency is NOT caused by binding price ceilings?

Use the following to answer questions: -(Figure: Rent Controls)Use Figure: Rent Controls.If rent controls are set at Rent₀,renters would be willing to pay a price at least as high as:

Use the following to answer question Figure: The Market for Clams -(Figure: The Market for Clams)Use Figure: The Market for Clams.The government imposes a quota limiting sales of clams to 1 000 kilograms.According to the figure,the quota rent per kilogram in this case is:

Use the following to answer questions: -(Figure: Price Controls)Use Figure: Price Controls.An effective price floor would be at price ___ and a _ would result from the difference between points ___.

In economic markets,a quota is a(n):

An effective minimum wage ultimately means that:

Use the following to answer question Figure: The Shrimp Market -(Figure: The Shrimp Market)Use Figure: The Shrimp Market.If the government wants to limit shrimp sales to 500 kilograms,it can impose a price:

Use the following to answer questions: -(Table: The Market for Pop)Use Table: The Market for Pop.If the government imposes a price ceiling of $1 per can of pop,the quantity of pop supplied will be _____ cans.

Use the following to answer questions: -(Table: Quantity Supplied and Quantity Demanded)Use Table: Quantity Supplied and Quantity Demanded.A government-imposed price ceiling equal to $5 would result in:

Price controls encourage black markets because:

A price ceiling on a good often results in:

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

International Trade

Macroeconomics: the Big Picture

Gdp and the Cpi: Tracking the Macroeconomy

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial System

Income and Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Graphs in Economics

Filters

Exam 4: Price Controls and Quotas: Meddling With Markets

Theoretically,the quota rent for a New York taxicab owner is equal to the market price of the licence that allows him to drive the cab.

Rent controls set a price ceiling below the equilibrium price,and therefore:

Use the following to answer question Figure: The Shrimp Market -If the minimum wage is a binding price floor:

When the government policy is to regulate the quantity of a good that can be bought and sold rather than the price at which it is transacted,it uses a:

If a quota is set above the equilibrium quantity,there will be:

Which inefficiency is NOT caused by binding price ceilings?

Use the following to answer questions: -(Figure: Rent Controls)Use Figure: Rent Controls.If rent controls are set at Rent0,renters would be willing to pay a price at least as high as:

Use the following to answer question Figure: The Market for Clams -(Figure: The Market for Clams)Use Figure: The Market for Clams.The government imposes a quota limiting sales of clams to 1 000 kilograms.According to the figure,the quota rent per kilogram in this case is:

Use the following to answer questions: -(Figure: Price Controls)Use Figure: Price Controls.An effective price floor would be at price _____ and a _____ would result from the difference between points _____.

In economic markets,a quota is a(n):

An effective minimum wage ultimately means that:

Use the following to answer question Figure: The Shrimp Market -(Figure: The Shrimp Market)Use Figure: The Shrimp Market.If the government wants to limit shrimp sales to 500 kilograms,it can impose a price:

Use the following to answer questions: -(Table: The Market for Pop)Use Table: The Market for Pop.If the government imposes a price ceiling of $1 per can of pop,the quantity of pop supplied will be _____ cans.

Use the following to answer questions: -(Table: Quantity Supplied and Quantity Demanded)Use Table: Quantity Supplied and Quantity Demanded.A government-imposed price ceiling equal to $5 would result in:

Price controls encourage black markets because:

A price ceiling on a good often results in:

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

International Trade

Macroeconomics: the Big Picture

Gdp and the Cpi: Tracking the Macroeconomy

Unemployment and Inflation

Long-Run Economic Growth

Savings, Investment Spending, and the Financial System

Income and Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Graphs in Economics

Filters

Use the following to answer questions: -(Figure: Rent Controls)Use Figure: Rent Controls.If rent controls are set at Rent₀,renters would be willing to pay a price at least as high as:

Use the following to answer questions: -(Figure: Price Controls)Use Figure: Price Controls.An effective price floor would be at price ___ and a _ would result from the difference between points ___.