Exam 4: Demand and Supply Applications

Refer to the information provided in Figure 4.3 below to answer the questions that follow. Figure 4.3 -Refer to Figure 4.3. An example of an effective price floor would be the government setting the price of pencils at

Ration coupons are tickets or coupons that give someone a right to purchase a certain amount of a product each time period such as a month.

Refer to the information provided in Figure 4.4 below to answer the questions that follow. Figure 4.4 -Refer to Figure 4.4. Assume that initially there is free trade. If the United States then imposes a $25 tax per barrel of imported oil, the tax revenue generated will equal

Goods are allocated in a market system by price rationing.

The total of producer and consumer surplus is maximized when there is underproduction.

In a "black market,"

People scalping tickets for the Super Bowl will be successful at selling the tickets for a profit

If someone is willing to pay $500 to go to the Super Bowl but can buy a ticket for $300, they will get $200 in consumer surplus.

The government imposes a price ceiling on gasoline that is below the market price. You are asked to suggest a rationing scheme that will minimize the misallocation of resources. You suggest

Refer to the information provided in Figure 4.2 below to answer the questions that follow. Figure 4.2 -Refer to Figure 4.2. The market is initially in equilibrium at Point A and supply shifts from S1 to S2. Which of the following statements is true?

Refer to the information provided in Figure 4.1 below to answer the questions that follow. Figure 4.1 -Refer to Figure 4.1. At the world price of 30 cents per apple the United States imports ________ million apples per day.

An example of an ineffective price ceiling would be the government setting the price of wheat at ________ per bushel when the market price is at $5.00 per bushel.

Refer to the information provided in Figure 4.6 below to answer the questions that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -In figure 4.6 if price is P1, producer surplus is area

Favored customers are customers who receive special treatment from dealers during periods of

Refer to the information provided in Figure 4.6 below to answer the questions that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -In figure 4.6 if price goes from equilibrium to P1, consumer surplus changes by the area

Refer to the information provided in Figure 4.1 below to answer the questions that follow. Figure 4.1 -Refer to Figure 4.1. If the United States levies no taxes on apples, the price of apples in the United States would fall to ________, and the United States would import ________.

The price system

Queuing, or waiting in line, is an alternative rationing mechanism to price rationing.

Refer to the information provided in Figure 4.4 below to answer the questions that follow. Figure 4.4 -Refer to Figure 4.4. Assume that initially there is free trade. To reduce U.S. imports without a tax, the U.S. could

A minimum price, set by the government, that sellers may charge for a good is known as