Exam 4: Price Controls and Quotas: Meddling With Markets

Use the following to answer question : -A binding price floor is a _____ price set _____ the equilibrium price.

Inefficient allocations of goods to consumers often result from:

The quota rent is the result of a supply price that is above the demand price.

If the province of Quebec established a price floor in the market for pumpkins that was double the current market-clearing price,this would lead to an inefficient number of pumpkins sold in Quebec.

The government might impose a price ceiling if _____ in a market can make a strong moral or political argument for _____ prices.

An effective price floor would result in a(n):

Use the following to answer questions: -(Figure: Rent Controls)Use Figure: Rent Controls.If rent controls are imposed and the government wants them to be immediately effective,they will most likely be set at either _____ or _____.

If the government sets out to help low-income people by establishing a maximum amount that can be paid for rent:

Economic models predict that a binding minimum wage will generally cause increased unemployment for low-skilled workers.

A quota is the minimum amount of some good that can be bought and sold in the market.

Quantity controls usually take the form of price ceilings or price floors established by the government.

Use the following to answer questions: -(Table: Market for Banana Muffins)Use Table: Market for Banana Muffins.If the government imposes a quota of 5 000 on the banana muffin market,the quota rent per banana muffin will be:

Use the following to answer questions: Figure: The Market for Sandwiches -(Figure: The Market for Sandwiches)Use Figure: The Market for Sandwiches.Suppose that a price floor is set at $7.At this price,consumer surplus is equal to _____ and producer surplus is equal to _____.

Use the following to answer question 40: -(Figure: The Market for Hybrid Cars)Use Figure: The Market for Hybrid Cars.If there were a binding price ceiling in the market for hybrid cars,one possible price would be equal to _____,consumers would demand _____,and producers would supply _____.

Use the following to answer questions: Figure: The Shrimp Market -(Figure: The Shrimp Market)Use Figure: The Shrimp Market.If the government imposes a quota limiting sales of shrimp to 250 kilograms,the quota rent per kilogram is:

Use the following to answer questions: -(Figure: Rent Controls)Use 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?

A price floor or a price ceiling is an example of:

Use the following to answer question : -Hugo Chávez was the president of Venezuela.Venezuela is a major producer of oil products,which remain a critical component of Venezuela's economy.Suppose that 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% of the previous price.This policy is called a:

Use the following to answer questions: -(Figure: Rent Controls)Use Figure: Rent Controls.If rent controls are set at Rent₀:

The difference between the demand price and the supply price at the quota limit is: