Question 1

By definition,in a black market,goods or services are bought and sold:

Accepted Answer

A)   at night.
B)   without any information about quality.
C)   without any information about price.
D)   illegally.E) None of the above
F) All of the above

Question 2

An increase in producer surplus would most likely occur if:

Accepted Answer

A)   an effective price floor was imposed.
B)   an effective price ceiling was imposed.
C)   the market price of the good decreased.
D)   no changes occurred in the market.E) A) and B)
F) None of the above

Question 3

Use the following to answer questions :
Figure: The Market for Sandwiches 
-(Figure: The Market for Sandwiches) Use Figure: The Market for Sandwiches.How much total surplus would be lost if there were a quota of eight sandwiches that could be legally exchanged?

Accepted Answer

A)   $3
B)   $24
C)   $27
D)   $30E) C) and D)
F) A) and C)

Question 4

Use the following to answer questions :
Table: The Market for Taxi Rides   Fare  (per ride)   Quantity Demanded  (millions of rides  per year)   Quantity Supplied  (millions of rides  per year)  $7.006146.507136.008125.509115.0010104.501194.001283.501373.00146\begin{array} { c c c } \hline \begin{array} { l } 	ext { Fare } \	ext { (per ride)  }\end{array} & \begin{array} { c } 	ext { Quantity Demanded } \	ext { (millions of rides } \	ext { per year)  }\end{array} & \begin{array} { c } 	ext { Quantity Supplied } \	ext { (millions of rides } \	ext { per year)  }\end{array} \\hline \$ 7.00 & 6 & 14 \6.50 & 7 & 13 \6.00 & 8 & 12 \5.50 & 9 & 11 \5.00 & 10 & 10 \4.50 & 11 & 9 \4.00 & 12 & 8 \3.50 & 13 & 7 \3.00 & 14 & 6 \\hline\end{array} Fare  (per ride)  ​$7.006.506.005.505.004.504.003.503.00​ Quantity Demanded  (millions of rides  per year)  ​67891011121314​ Quantity Supplied  (millions of rides  per year)  ​14131211109876​​ 
-(Table: The Market for Taxi Rides) Use Table: The Market for Taxi Rides.If a government quota limit at 9 million rides is imposed,the quota rent that will accrue to the owner of a taxi licence will be _____ per ride,but there will be a total missed opportunity (inefficiency) to consumers and producers of _____ million rides.

Accepted Answer

A)   $1;1
B)   $2;2
C)   $3;3
D)   $4;4 E) None of the above
F) A) and D) A

Question 5

Use the following to answer questions :
Figure: The Market for Butter 
-(Figure: The Market for Butter) Use Figure: The Market for Butter.If a government price floor of $1.10 is imposed on this market,an inefficiency will result in the form of a _____ of _____ million kilograms of butter.

Accepted Answer

A)   surplus;4.5
B)   shortage;4.5
C)   surplus;3
D)   shortage;1.5E) B) and C)
F) C) and D)

Question 6

One of the ways rent control is inefficient is that it leads to:

Accepted Answer

A)   higher-quality apartments.
B)   high opportunity costs associated with wasted time searching for apartments.
C)   markets that maximize total surplus.
D)   the construction of more apartments.E) B) and D)
F) B) and C)

Question 7

Rapidly increasing child daycare costs have been a major political concern since well before 1992.Suppose that the government sets the maximum price for daily child daycare expenses at $20 per day,but the current market price is $40 per day.What is MOST likely to happen?

Accepted Answer

A)   More people will try to get access to the lower-cost child daycare,but there will be fewer daycares with spots available at that price.
B)   The same number of people will try to get access to daycare,and the same number of childcare centres are willing to accept them at that price.
C)   More people will have access to daycare,since the price is lower.
D)   Fewer people will try to enrol their children in daycare,and fewer daycare centres will be accepting new children at that price.E) None of the above
F) A) and B)

Question 8

Use the following to answer questions : 3 causes: A)  a shortage equal to the distance AB. B)  a surplus equal to the distance AB. C)  a shortage equal to the distance DE. D)  no change to the market." class="answers-bank-image d-inline" rel="preload" >
-(Figure: Supply and Demand) Use Figure: Supply and Demand.A price ceiling of P3 causes:

Accepted Answer

A)   a shortage equal to the distance AB.
B)   a surplus equal to the distance AB.
C)   a shortage equal to the distance DE.
D)   no change to the market.E) A) and B)
F) A) and C)

Question 9

Suppose that the average cost of a visit to the dentist is $100.If the government imposes a price ceiling of $50 on the cost of a dental visit,there will be:

Accepted Answer

A)   an excess supply of dental visits.
B)   an excess demand for dental visits.
C)   an increase in the equilibrium number of dental visits.
D)   no change in the number of dental visits.E) None of the above
F) C) and D)

Question 10

Inefficient allocations of goods to consumers often result from:

Accepted Answer

A)   price ceilings.
B)   producer surpluses.
C)   increases in income.
D)   market transactions.E) C) and D)
F) B) and D)

Question 11

Use the following to answer questions : 0;Rent1 B)  Rent1;Rent3 C)  Rent3;Rent4 D)  Rent2;Rent4" class="answers-bank-image d-inline" rel="preload" >
-(Figure: Rent Controls) Use Figure: Rent Controls.If rent controls are imposed and the government wants them to be immediately effective,they will most likely be set at either _____ or _____.

Accepted Answer

A)   Rent0;Rent1
B)   Rent1;Rent3
C)   Rent3;Rent4
D)   Rent2;Rent4E) A) and B)
F) A) and C)

Question 12

Use the following to answer questions : 4;surplus;Q3-Q0 B)  floor;P2;surplus;Q2-Q0 C)  ceiling;P4;surplus;Q2-Q1 D)  floor;P1;shortage;Q3-Q0" class="answers-bank-image d-inline" rel="preload" >
-(Figure: Supply and Demand in Agriculture) Use Figure: Supply and Demand in Agriculture.The government could help increase some farmers' income by setting a price _____ at _____,causing a _____ of _____.

Accepted Answer

A)   floor;P4;surplus;Q3-Q0
B)   floor;P2;surplus;Q2-Q0
C)   ceiling;P4;surplus;Q2-Q1
D)   floor;P1;shortage;Q3-Q0E) All of the above
F) B) and C)

Question 13

Use the following to answer question 90:
Figure: The Shrimp Market 
-If the minimum wage is a binding price floor:

Accepted Answer

A)   those who want to work will outnumber the jobs available.
B)   the market-clearing equilibrium wage will increase.
C)   there will be a job for everyone who is willing to work.
D)   business owners will hire more workers.E) A) and B)
F) A) and C)

Question 14

Quotas are more effective than price controls because,unlike price controls,quotas do not cause deadweight loss.

Accepted Answer

A) True 
 B)False

Question 15

Government intervention in the form of binding price floors or binding price ceilings will:

Accepted Answer

A)   always enhance the efficiency of the market.
B)   result in either surpluses or shortages.
C)   move the market toward its equilibrium quantity more quickly.
D)   often be seen as necessary to decrease the activity of black markets.E) A) and B)
F) A) and C)

Question 16

Suppose that the Jamaican government sets coffee prices at $1 per kilogram when the market price is $10 per kilogram.The government's actions will:

Accepted Answer

A)   improve efficiency since the low prices will force producers to find cheaper production methods.
B)   result in coffee surpluses,even in a coffee-rich country.
C)   cause coffee shortages,even in a coffee-rich country.
D)   improve equality between rich and poor since the poor can now afford coffee.E) A) and D)
F) All of the above C

Question 17

A price ceiling is:

Accepted Answer

A)   a maximum price sellers are allowed to charge for a good or service.
B)   the difference between the quantity supplied and quantity demanded.
C)   a minimum price buyers are required to pay for a good or service.
D)   the deadweight loss caused by an inefficiently low quantity.E) All of the above
F) None of the above

Question 18

Use the following to answer questions : 1? A)  a B)  a + b C)  a + b + c D)  a + b + d" class="answers-bank-image d-inline" rel="preload" >
-(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 + dE) A) and C)
F) C) and D)

Question 19

Price controls:

Accepted Answer

A)   always increase economic efficiency.
B)   always lead to more equitable results.
C)   can result in inequitable outcomes.
D)   are always set below the equilibrium price.E) C) and D)
F) A) and D) C

Question 20

The upper limit on the quantity of a good that can be bought and sold is the:

Accepted Answer

A)   quota limit.
B)   price ceiling.
C)   price floor.
D)   tariff.E) A) and D)
F) B) and C)

Exam 5: Price Controls and Quotas

By definition,in a black market,goods or services are bought and sold:

Correct Answer
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An increase in producer surplus would most likely occur if:

Correct Answer
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Use the following to answer questions : Figure: The Market for Sandwiches -(Figure: The Market for Sandwiches) Use Figure: The Market for Sandwiches.How much total surplus would be lost if there were a quota of eight sandwiches that could be legally exchanged?

Correct Answer
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Correct Answer
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A

Use the following to answer questions : Figure: The Market for Butter -(Figure: The Market for Butter) Use Figure: The Market for Butter.If a government price floor of $1.10 is imposed on this market,an inefficiency will result in the form of a _ of _ million kilograms of butter.

Correct Answer
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One of the ways rent control is inefficient is that it leads to:

Correct Answer
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Rapidly increasing child daycare costs have been a major political concern since well before 1992.Suppose that the government sets the maximum price for daily child daycare expenses at $20 per day,but the current market price is $40 per day.What is MOST likely to happen?

Correct Answer
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Use the following to answer questions : -(Figure: Supply and Demand) Use Figure: Supply and Demand.A price ceiling of P₃ causes:

Correct Answer
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Suppose that the average cost of a visit to the dentist is $100.If the government imposes a price ceiling of $50 on the cost of a dental visit,there will be:

Correct Answer
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Inefficient allocations of goods to consumers often result from:

Correct Answer
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Use the following to answer questions : -(Figure: Rent Controls) Use Figure: Rent Controls.If rent controls are imposed and the government wants them to be immediately effective,they will most likely be set at either _ or _.

Correct Answer
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Use the following to answer questions : -(Figure: Supply and Demand in Agriculture) Use Figure: Supply and Demand in Agriculture.The government could help increase some farmers' income by setting a price ___ at _,causing a _ of ___.

Correct Answer
verified

Use the following to answer question 90: Figure: The Shrimp Market -If the minimum wage is a binding price floor:

Correct Answer
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Quotas are more effective than price controls because,unlike price controls,quotas do not cause deadweight loss.

Correct Answer
verified

Government intervention in the form of binding price floors or binding price ceilings will:

Correct Answer
verified

Suppose that the Jamaican government sets coffee prices at $1 per kilogram when the market price is $10 per kilogram.The government's actions will:

Correct Answer
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C

A price ceiling is:

Correct Answer
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Use the following to answer questions : -(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?

Correct Answer
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Price controls:

Correct Answer
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C

The upper limit on the quantity of a good that can be bought and sold is the:

Correct Answer
verified

Exam 5: Price Controls and Quotas

By definition,in a black market,goods or services are bought and sold:

Correct AnswerverifiedShow Answer

An increase in producer surplus would most likely occur if:

Correct AnswerverifiedShow Answer

Use the following to answer questions : Figure: The Market for Sandwiches -(Figure: The Market for Sandwiches) Use Figure: The Market for Sandwiches.How much total surplus would be lost if there were a quota of eight sandwiches that could be legally exchanged?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA

Use the following to answer questions : Figure: The Market for Butter -(Figure: The Market for Butter) Use Figure: The Market for Butter.If a government price floor of $1.10 is imposed on this market,an inefficiency will result in the form of a _____ of _____ million kilograms of butter.

Correct AnswerverifiedShow Answer

One of the ways rent control is inefficient is that it leads to:

Correct AnswerverifiedShow Answer

Rapidly increasing child daycare costs have been a major political concern since well before 1992.Suppose that the government sets the maximum price for daily child daycare expenses at $20 per day,but the current market price is $40 per day.What is MOST likely to happen?

Correct AnswerverifiedShow Answer

Use the following to answer questions : -(Figure: Supply and Demand) Use Figure: Supply and Demand.A price ceiling of P3 causes:

Correct AnswerverifiedShow Answer

Suppose that the average cost of a visit to the dentist is $100.If the government imposes a price ceiling of $50 on the cost of a dental visit,there will be:

Correct AnswerverifiedShow Answer

Inefficient allocations of goods to consumers often result from:

Correct AnswerverifiedShow Answer

Use the following to answer questions : -(Figure: Rent Controls) Use Figure: Rent Controls.If rent controls are imposed and the government wants them to be immediately effective,they will most likely be set at either _____ or _____.

Correct AnswerverifiedShow Answer

Use the following to answer questions : -(Figure: Supply and Demand in Agriculture) Use Figure: Supply and Demand in Agriculture.The government could help increase some farmers' income by setting a price _____ at _____,causing a _____ of _____.

Correct AnswerverifiedShow Answer

Use the following to answer question 90: Figure: The Shrimp Market -If the minimum wage is a binding price floor:

Correct AnswerverifiedShow Answer

Quotas are more effective than price controls because,unlike price controls,quotas do not cause deadweight loss.

Correct AnswerverifiedShow Answer

Government intervention in the form of binding price floors or binding price ceilings will:

Correct AnswerverifiedShow Answer

Suppose that the Jamaican government sets coffee prices at $1 per kilogram when the market price is $10 per kilogram.The government's actions will:

Correct AnswerverifiedC

A price ceiling is:

Correct AnswerverifiedShow Answer

Use the following to answer questions : -(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?

Correct AnswerverifiedShow Answer

Price controls:

Correct AnswerverifiedC

The upper limit on the quantity of a good that can be bought and sold is the:

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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A

Use the following to answer questions : Figure: The Market for Butter -(Figure: The Market for Butter) Use Figure: The Market for Butter.If a government price floor of $1.10 is imposed on this market,an inefficiency will result in the form of a _ of _ million kilograms of butter.

Correct Answer
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Correct Answer
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Correct Answer
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Use the following to answer questions : -(Figure: Supply and Demand) Use Figure: Supply and Demand.A price ceiling of P₃ causes:

Correct Answer
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Correct Answer
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Correct Answer
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Use the following to answer questions : -(Figure: Rent Controls) Use Figure: Rent Controls.If rent controls are imposed and the government wants them to be immediately effective,they will most likely be set at either _ or _.

Correct Answer
verified

Use the following to answer questions : -(Figure: Supply and Demand in Agriculture) Use Figure: Supply and Demand in Agriculture.The government could help increase some farmers' income by setting a price ___ at _,causing a _ of ___.

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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C

Correct Answer
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Use the following to answer questions : -(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?

Correct Answer
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Correct Answer
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C

Correct Answer
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