Question 1

Deadweight loss from the imposition of a price floor increases as consumer demand becomes more price elastic.

Accepted Answer

A) True 
 B)False

Question 2

Demand curves with constant slopes must have different own-price elasticities as one moves along the demand curve.

Accepted Answer

A) True 
 B)False

Question 3

When leisure is an inferior good, the wage elasticity of labor supply is always positive.

Accepted Answer

A) True 
 B)False

Question 4

Suppose a consumer only consumes goods x and y, and suppose that x is a normal good while y is an inferior good.Which of the following is might be true?

Accepted Answer

A) The cross-price elasticity of demand for x is positive. 
B) The cross-price elasticity of demand for x is negative. 
C) The own-price elasticity of demand for y is positive. 
D) The own-price elasticity of demand for y is negative. 
E) Both (a) and (c).
F)Both (b) and (d).
G)All of the above.
H)None of the above.

Question 5

To have an effect on the market price, price ceilings must be set above the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 6

The concept of "non-price rationing" means that, in general, we can deal with scarcity just as well without prices as with prices.

Accepted Answer

A) True 
 B)False

Question 7

The wage elasticity of labor demand is always negative.

Accepted Answer

A) True 
 B)False

Question 8

The greater the price elasticity of market demand, the less will be the reduction in market output from a price floor.

Accepted Answer

A) True 
 B)False

Exam 18: Elasticities, Price-Distorting Policies, and Non-Price Rationing

Deadweight loss from the imposition of a price floor increases as consumer demand becomes more price elastic.

Demand curves with constant slopes must have different own-price elasticities as one moves along the demand curve.

When leisure is an inferior good, the wage elasticity of labor supply is always positive.

Suppose a consumer only consumes goods x and y, and suppose that x is a normal good while y is an inferior good.Which of the following is might be true?

To have an effect on the market price, price ceilings must be set above the equilibrium price.

The concept of "non-price rationing" means that, in general, we can deal with scarcity just as well without prices as with prices.

The wage elasticity of labor demand is always negative.

The greater the price elasticity of market demand, the less will be the reduction in market output from a price floor.