Question 1

Exhibit 4-8
  
-Refer to Exhibit 4-8. If the wheat market is in competitive equilibrium the total surplus will equal

Accepted Answer

A)  area 1 + 2 + 3 + 4 + 5 
B)  area 1 + 2 + 3 
C)  area 2 + 3 + 4 + 5 
D)  area 4 + 5 
A)  area 1 + 2 + 3 + 4 + 5 
B)  area 1 + 2 + 3 
C)  area 2 + 3 + 4 + 5 
D)  area 4 + 5

Question 2

A price floor set above the equilibrium price will

Accepted Answer

A)  clear the market for the good. 
B)  result in a shortage of the good. 
C)  result in a surplus of the good. 
D)  force some firms in this industry to go out of business. 
A)  clear the market for the good. 
B)  result in a shortage of the good. 
C)  result in a surplus of the good. 
D)  force some firms in this industry to go out of business.

Question 3

Exhibit 4-3
  
-Refer to Exhibit 4-3.If price P? is a price floor,then

Accepted Answer

A)  the quantity exchanged is Q1. 
B)  there is a surplus in the market for good X. 
C)  it is the lowest price that can legally be charged in the market for good X. 
D)  both b and c 
E)  all of the above 
A)  the quantity exchanged is Q1. 
B)  there is a surplus in the market for good X. 
C)  it is the lowest price that can legally be charged in the market for good X. 
D)  both b and c 
E)  all of the above

Question 4

Exhibit 4-8
  
-Refer to Exhibit 4-8. Suppose that wheat producers lobby the government for a price floor and receive one. This price floor is set at PF. What is the size of the consumers' surplus at PF?

Accepted Answer

A)  area 5 
B)  area 6 
C)  area 1 + 2 + 4 
D)  area 1 
A)  area 5 
B)  area 6 
C)  area 1 + 2 + 4 
D)  area 1

Question 5

Exhibit 4-3
  
-Refer to Exhibit 4-3.If price P1 is a price ceiling,then

Accepted Answer

A)  the quantity exchanged is Q3. 
B)  there is a shortage in this market. 
C)  it is the highest price that can legally be charged in this market. 
D)  both b and c. 
E)  all of the above 
A)  the quantity exchanged is Q3. 
B)  there is a shortage in this market. 
C)  it is the highest price that can legally be charged in this market. 
D)  both b and c. 
E)  all of the above

Question 6

A price floor creates a situation in which one party wins and another party loses,and the gains for the winner are equal to the losses for the loser.

Accepted Answer

A) True 
 B)False

Question 7

Exhibit 4-8
  
-Refer to Exhibit 4-8. Suppose that wheat producers lobby the government for a price floor and receive one. This price floor is set at PF. What has happened to the producers' surplus as a result of the imposition of the price floor?

Accepted Answer

A)  Producers' surplus has risen by (area 2 + 3) 
B)  Producers' surplus has fallen by (area 4 + 5) 
C)  Producers' surplus has changed by (area 3 - area 5) 
D)  Producers' surplus has changed by (area 2 - area 5) 
A)  Producers' surplus has risen by (area 2 + 3) 
B)  Producers' surplus has fallen by (area 4 + 5) 
C)  Producers' surplus has changed by (area 3 - area 5) 
D)  Producers' surplus has changed by (area 2 - area 5)

Exam 4: Prices: Free, Controlled, and Relative

Exhibit 4-8 -Refer to Exhibit 4-8. If the wheat market is in competitive equilibrium the total surplus will equal

A price floor set above the equilibrium price will

Exhibit 4-3 -Refer to Exhibit 4-3.If price P? is a price floor,then

Exhibit 4-8 -Refer to Exhibit 4-8. Suppose that wheat producers lobby the government for a price floor and receive one. This price floor is set at PF. What is the size of the consumers' surplus at PF?

Exhibit 4-3 -Refer to Exhibit 4-3.If price P1 is a price ceiling,then

A price floor creates a situation in which one party wins and another party loses,and the gains for the winner are equal to the losses for the loser.

Exhibit 4-8 -Refer to Exhibit 4-8. Suppose that wheat producers lobby the government for a price floor and receive one. This price floor is set at PF. What has happened to the producers' surplus as a result of the imposition of the price floor?

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Supply, Demand, and Price: Applications

Macroeconomic Measurements: Prices and Unemployment

Macroeconomic Measurements: GDP and Real GDP

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self Regulating Economy

Keynesian Macroeconomics and Economic Instability: A Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money, Banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, Technology, Ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice: Maximizing Utility and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition, Oligopoly, and Game Theory

Government and Product Markets: Antitrust and Regulation

Factor Markets: With Emphasis on the Labor Market

Wages,Unions,and Labor

The Distribution of Income and Poverty

Interest, Rent, and Profit

Market Failure: Externalities, Public Goods, and Asymmetric Information

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case For and Against Government: Five Topics Considered

Stocks, Bonds, Futures, and Options

Agriculture: Problems, Policies, and Unintended Effects

Filters

Exhibit 4-3 -Refer to Exhibit 4-3.If price P_? is a price floor,then

Exhibit 4-8 -Refer to Exhibit 4-8. Suppose that wheat producers lobby the government for a price floor and receive one. This price floor is set at P_F. What is the size of the consumers' surplus at P_F?

Exhibit 4-3 -Refer to Exhibit 4-3.If price P₁ is a price ceiling,then

Exhibit 4-8 -Refer to Exhibit 4-8. Suppose that wheat producers lobby the government for a price floor and receive one. This price floor is set at P_F. What has happened to the producers' surplus as a result of the imposition of the price floor?