Question 1

Use the following to answer question 
Figure: The Shrimp Market  
-Which example would be considered a price floor?

Accepted Answer

A)  a rent-controlled apartment 
B)  a maximum legal price that could be charged for gasoline during a time of war 
C)  the minimum wage 
D)  a government decree that capped the price of bottled water in the aftermath of a devastating hurricane 
A)  a rent-controlled apartment 
B)  a maximum legal price that could be charged for gasoline during a time of war 
C)  the minimum wage 
D)  a government decree that capped the price of bottled water in the aftermath of a devastating hurricane

Question 2

Farmers in developing countries want Canada to reduce the subsidies that it gives to Canadian farmers because subsidized agricultural products from Canada:

Accepted Answer

A)  lead to agricultural surpluses and lower prices for farmers in developing countries. 
B)  raise the world price of agricultural products. 
C)  have led to a global shortage of agricultural products. 
D)  have led to an increase in the demand for agricultural products from the developing world. 
A)  lead to agricultural surpluses and lower prices for farmers in developing countries. 
B)  raise the world price of agricultural products. 
C)  have led to a global shortage of agricultural products. 
D)  have led to an increase in the demand for agricultural products from the developing world.

Question 3

If minimum wages are set above the equilibrium wage in the market,then the number of workers hired will be _____ the number of people who are willing to work at the prevailing wage.

Accepted Answer

A)  less than 
B)  greater than 
C)  equal to 
D)  less than,greater than,or equal to 
A)  less than 
B)  greater than 
C)  equal to 
D)  less than,greater than,or equal to

Question 4

Use the following to answer question 73:  
-(Table: Market for Butter)Use Figure: Market for Butter.If the government imposes a price floor of $0.90 per kilogram of butter,the quantity of butter actually purchased will be _____ million kilograms.

Accepted Answer

A)  10.5 
B)  9.0 
C)  1.5 
D)  10.0 
A)  10.5 
B)  9.0 
C)  1.5 
D)  10.0

Question 5

A price ceiling benefits all consumers.

Accepted Answer

A) True 
 B)False

Question 6

The Canadian Medical Association licenses doctors.This licensing has probably led to lower earnings for doctors over time.

Accepted Answer

A) True 
 B)False

Question 7

Use the following to answer questions:
Figure: Market I  
-(Figure: Market I)Use Figure: Market I.A price floor of $5 imposed on this market would:

Accepted Answer

A)  result in a surplus of the good. 
B)  have no immediate effect. 
C)  increase production of this good. 
D)  increase consumer spending on this good. 
A)  result in a surplus of the good. 
B)  have no immediate effect. 
C)  increase production of this good. 
D)  increase consumer spending on this good.

Question 8

Quotas,price ceilings,and price floors are all types of quantity controls that the government may impose.

Accepted Answer

A) True 
 B)False

Question 9

To be binding,a price floor must be set:

Accepted Answer

A)  lower than the equilibrium price. 
B)  higher than the equilibrium price. 
C)  so that quantity demanded exceeds quantity supplied. 
D)  lower than the equilibrium price,so that quantity demanded exceeds quantity supplied. 
A)  lower than the equilibrium price. 
B)  higher than the equilibrium price. 
C)  so that quantity demanded exceeds quantity supplied. 
D)  lower than the equilibrium price,so that quantity demanded exceeds quantity supplied.

Question 10

Use the following to answer question :  
-(Figure: The Market for Hybrid Cars)Use Figure: The Market for Hybrid Cars.What area represents consumer surplus if there is a binding price floor at P1?

Accepted Answer

A)  a 
B)  a + b 
C)  a + b + c 
D)  a + b + d 
A)  a 
B)  a + b 
C)  a + b + c 
D)  a + b + d

Question 11

The government decides to impose a price ceiling on a good because it thinks that the market-determined price is too high.If the government imposes the price ceiling below the equilibrium price:

Accepted Answer

A)  consumers will respond to the lower price and wish to purchase more of the good than at the equilibrium price. 
B)  producers will respond to the lower price and offer more units for sale. 
C)  consumers will be able to purchase more of the good after the price ceiling is imposed. 
D)  it will not be binding. 
A)  consumers will respond to the lower price and wish to purchase more of the good than at the equilibrium price. 
B)  producers will respond to the lower price and offer more units for sale. 
C)  consumers will be able to purchase more of the good after the price ceiling is imposed. 
D)  it will not be binding.

Question 12

A quota is a:

Accepted Answer

A)  quantity restriction. 
B)  price control. 
C)  form of consumer surplus. 
D)  means to combat black markets. 
A)  quantity restriction. 
B)  price control. 
C)  form of consumer surplus. 
D)  means to combat black markets.

Question 13

A maximum price legislated by the government is called:

Accepted Answer

A)  a price support. 
B)  a price floor. 
C)  a price ceiling. 
D)  the parity price. 
A)  a price support. 
B)  a price floor. 
C)  a price ceiling. 
D)  the parity price.

Question 14

Rent controls in New York City do NOT cause:

Accepted Answer

A)  inefficiently low-quality apartments. 
B)  wasted resources resulting from the opportunity cost of time associated with trying to find an apartment. 
C)  black markets. 
D)  an increase in the quantity supplied of rent-controlled apartments. 
A)  inefficiently low-quality apartments. 
B)  wasted resources resulting from the opportunity cost of time associated with trying to find an apartment. 
C)  black markets. 
D)  an increase in the quantity supplied of rent-controlled apartments.

Question 15

A binding price floor in the market for wheat:

Accepted Answer

A)  increases the price paid by consumers. 
B)  decreases the price paid by consumers. 
C)  decreases the price received by farmers. 
D)  does not change the price received by farmers. 
A)  increases the price paid by consumers. 
B)  decreases the price paid by consumers. 
C)  decreases the price received by farmers. 
D)  does not change the price received by farmers.

Question 16

Assuming that Canadian and French wines are substitutes in consumption,if the Canadian government imposes a quota on the amount of French wine allowed into Canada and the quota is set at a quantity below equilibrium,the price of French wine in Canada will _____ while the price of the Canadian-produced wine will _____.

Accepted Answer

A)  increase;increase 
B)  increase;decrease 
C)  decrease;increase 
D)  decrease;decrease 
A)  increase;increase 
B)  increase;decrease 
C)  decrease;increase 
D)  decrease;decrease

Question 17

Use the following to answer questions:  
-(Table: Market for Apartments)Use Table: Market for Apartments.If a price ceiling of $900 is imposed on this market,the result will be an inefficiency in the form of a _____ million apartments.

Accepted Answer

A)  surplus of 0.6 
B)  shortage of 0.6 
C)  surplus of 0.2 
D)  shortage of 0.2 
A)  surplus of 0.6 
B)  shortage of 0.6 
C)  surplus of 0.2 
D)  shortage of 0.2

Question 18

Quantity controls set below the equilibrium quantity do NOT cause:

Accepted Answer

A)  incentives for illegal activities. 
B)  missed opportunities in the form of mutually beneficial transactions that don't occur. 
C)  the supply price of the quantity transacted to exceed the demand price of the quantity transacted. 
D)  quota rents. 
A)  incentives for illegal activities. 
B)  missed opportunities in the form of mutually beneficial transactions that don't occur. 
C)  the supply price of the quantity transacted to exceed the demand price of the quantity transacted. 
D)  quota rents.

Question 19

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

Accepted Answer

A)  consumers;lower 
B)  producers;lower 
C)  consumers;higher 
D)  producers;higher 
A)  consumers;lower 
B)  producers;lower 
C)  consumers;higher 
D)  producers;higher

Question 20

Which example is a quota?

Accepted Answer

A)  rent controls in Toronto 
B)  property taxes on beachfront property in Vancouver 
C)  limits on the number of salmon that can be caught in British Colombia 
D)  the maximum reimbursement that insurance will pay for a dental procedure 
A)  rent controls in Toronto 
B)  property taxes on beachfront property in Vancouver 
C)  limits on the number of salmon that can be caught in British Colombia 
D)  the maximum reimbursement that insurance will pay for a dental procedure

Use the following to answer question Figure: The Shrimp Market -Which example would be considered a price floor?

Farmers in developing countries want Canada to reduce the subsidies that it gives to Canadian farmers because subsidized agricultural products from Canada:

If minimum wages are set above the equilibrium wage in the market,then the number of workers hired will be _____ the number of people who are willing to work at the prevailing wage.

Use the following to answer question 73: -(Table: Market for Butter)Use Figure: Market for Butter.If the government imposes a price floor of $0.90 per kilogram of butter,the quantity of butter actually purchased will be _____ million kilograms.

A price ceiling benefits all consumers.

The Canadian Medical Association licenses doctors.This licensing has probably led to lower earnings for doctors over time.

Use the following to answer questions: Figure: Market I -(Figure: Market I)Use Figure: Market I.A price floor of $5 imposed on this market would:

Quotas,price ceilings,and price floors are all types of quantity controls that the government may impose.

To be binding,a price floor must be set:

Use the following to answer question : -(Figure: The Market for Hybrid Cars)Use Figure: The Market for Hybrid Cars.What area represents consumer surplus if there is a binding price floor at P₁?

The government decides to impose a price ceiling on a good because it thinks that the market-determined price is too high.If the government imposes the price ceiling below the equilibrium price:

A quota is a:

A maximum price legislated by the government is called:

Rent controls in New York City do NOT cause:

A binding price floor in the market for wheat:

Use the following to answer questions: -(Table: Market for Apartments)Use Table: Market for Apartments.If a price ceiling of $900 is imposed on this market,the result will be an inefficiency in the form of a _____ million apartments.

Quantity controls set below the equilibrium quantity do NOT cause:

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

Which example is a quota?

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

Use the following to answer question Figure: The Shrimp Market -Which example would be considered a price floor?

Farmers in developing countries want Canada to reduce the subsidies that it gives to Canadian farmers because subsidized agricultural products from Canada:

If minimum wages are set above the equilibrium wage in the market,then the number of workers hired will be _____ the number of people who are willing to work at the prevailing wage.

Use the following to answer question 73: -(Table: Market for Butter)Use Figure: Market for Butter.If the government imposes a price floor of $0.90 per kilogram of butter,the quantity of butter actually purchased will be _____ million kilograms.

A price ceiling benefits all consumers.

The Canadian Medical Association licenses doctors.This licensing has probably led to lower earnings for doctors over time.

Use the following to answer questions: Figure: Market I -(Figure: Market I)Use Figure: Market I.A price floor of $5 imposed on this market would:

Quotas,price ceilings,and price floors are all types of quantity controls that the government may impose.

To be binding,a price floor must be set:

Use the following to answer question : -(Figure: The Market for Hybrid Cars)Use Figure: The Market for Hybrid Cars.What area represents consumer surplus if there is a binding price floor at P1?

The government decides to impose a price ceiling on a good because it thinks that the market-determined price is too high.If the government imposes the price ceiling below the equilibrium price:

A quota is a:

A maximum price legislated by the government is called:

Rent controls in New York City do NOT cause:

A binding price floor in the market for wheat:

Use the following to answer questions: -(Table: Market for Apartments)Use Table: Market for Apartments.If a price ceiling of $900 is imposed on this market,the result will be an inefficiency in the form of a _____ million apartments.

Quantity controls set below the equilibrium quantity do NOT cause:

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

Which example is a quota?

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 question : -(Figure: The Market for Hybrid Cars)Use Figure: The Market for Hybrid Cars.What area represents consumer surplus if there is a binding price floor at P₁?

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