Exam 5: Price Controls and Quotas- Meddling With Markets

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

The NFL wants to give the "common fan" the opportunity to attend the Super Bowl, so it sets Super Bowl prices "low"-tickets for a regular seat at Super Bowl XXXVII cost just $400. Scalpers, however, sell tickets for $1,500 or more. If there are no transaction costs to selling a ticket, the true cost of a regular ticket to Super Bowl XXXVII is:

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

When a tenant in a rent-controlled apartment sublets the apartment to another renter at a rent higher than the price ceiling:

Use the following to answer questions Table: Market for Apartments -(Table: Market for Apartments) Look at the table Market for Apartments. If a government price ceiling of $600 is imposed on this market, the result will be an inefficiency in the form of a _____ million apartments.

Use the following to answer question Figure: Price Control -(Figure: Price Control) Look at the figure Price Control. One effective price ceiling would be the price indicated at point _____, and there would be a _____ equal to the difference between points _____.

Hugo Chávez was the president of Venezuela. Venezuela is a major producer of oil products, which remain the keystone of Venezuela's economy. Suppose 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 percent of the previous price. This policy is called a:

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

Use the following to answer question Figure: The Market for Tortillas -(Figure: The Market for Tortillas) Look at the figure The Market for Tortillas. With a nonbinding price floor, the price could be equal to _____, consumers would demand _____, and producers would supply _____.

Deadweight loss is the lost gains associated with transactions that do not occur because of market intervention, such as a quota.

A quota is:

Price controls encourage black markets because:

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

Quota limits cause:

The market for salmon is in equilibrium. A price ceiling, a price floor, and a quota limit in this market would all cause:

If the supply curve for clams is upward-sloping, a quota that is set below the equilibrium quantity will result in a supply price that is lower than the equilibrium price.

Licenses allowing taxis to operate issued by New York City in the 1930s are called medallions.

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

Use the following to answer questions Table: Market for Apartments -(Table: Market for Apartments) Look at the table Market for Apartments. If a price ceiling of $700 is imposed on this market, the result will be an inefficiency in the form of a _____ million apartments.

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