Exam 5: Price Controls and Quotas

Suppose that Canadian sheep farmers are very upset about the subsidies the UK government pays to British sheep farmers.One reason for this could be that subsidized wool from the United Kingdom:

Use the following to answer questions : Figure: The Market for Sandwiches -A binding price ceiling will cause a persistent _____,and a binding price floor will cause a persistent _____.

Use the following to answer question 94: -(Figure: The Market for English Textbooks)Use Figure: The Market for English Textbooks.With a binding price floor at $90,the market outcome would be a _____ of _____ textbooks.

Suppose that the government of the oil-rich country Saudi Arabia sets gasoline prices at $0.25 per litre when the market price is $1.50.The Saudi government's actions will:

An effective price floor will lead to:

If the demand curve for clams is downward sloping,a quota that is set below the equilibrium quantity will decrease the price that consumers pay for clams.

Use the following to answer questions : Table: Quantity Supplied and Quantity Demanded Price Quantity Demanded Quantity Supplied \ 0 100 25 5 90 40 10 80 55 15 70 70 20 60 85 -(Table: Quantity Supplied and Quantity Demanded)Use Table: Quantity Supplied and Quantity Demanded.A government-imposed price ceiling equal to $5 would result in:

A student organization forms on your university campus to protest the high rent for apartments near campus.This organization is planning a meeting with the dean and the president of the university.Which choice BEST describes one policy the student organization might fight for?

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:

A maximum price set below the equilibrium price is a:

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

In the rental housing market with price controls,the quantity of rental houses demanded exceeds the quantity of rental housing supplied.This price control must be a:

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

Which example is a quantity control?

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

Governments continue to impose price controls.Which statement is NOT a valid reason for this?

When transatlantic airfares were set artificially high by an international treaty,airlines offered customers an inefficiently high quality of service.

Use the following to answer questions : Table: The Market for Pop Market for a Can of Pop Price ( \/ unit) Quantity Demanded (cans) Quantity Supplied (cans) 0.50 10 7 0.75 8 8 1.00 6 9 1.25 4 10 1.50 2 11 -(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.

A rent-control scheme that sets the maximum allowable rent at a price below the equilibrium rental price would MOST likely be supported by:

Use the following to answer questions : -(Figure: Rent Controls)Use Figure: Rent Controls.If rent controls are set at Rent₁: