Exam 7: Government Actions in Markets

-The above figure shows the market for DVDs.The government decides that all citizens deserve to watch affordable DVDs so a price ceiling of $12 per DVD is placed on DVDs.After this price ceiling is in effect and taking account of the resources lost in search,consumer surplus equals ________.

Which of the following is true regarding a price support set above the equilibrium price? i.The price support increases the price consumers pay. ii.The price support creates a deadweight loss. iii.The price support decreases output.

A minimum wage set above the equilibrium wage

-The graph shows the labor market for teenagers in Atlanta.If the government sets a minimum wage of $6 an hour,the number of teenagers employed is ________.

-The graph shows the market for holiday condos in West Palm Beach.The equilibrium rent is ________ a week.

Which of the following results from a price ceiling? i.increased search activity ii.surplus iii.black market

If a price ceiling is introduced in the market for milk below the market equilibrium price,then the producer surplus made by dairy farmers ________.

Discuss the inefficiencies created by a price floor.

-The above figure shows the market for a prescription drug.What is the equilibrium price of the drug? How many doses are purchased? Suppose the government imposes a price ceiling of $1.50 a dose.How many doses are purchased after the price ceiling is imposed?

-The above figure shows a housing market with a rent ceiling equal to $1,000.In this figure,after taking account of the resources lost in search,what area is equal to the consumer surplus?

-The above figure shows the domestic market for tomatoes.Suppose this market is isolated from global competition and there is a support price set at $16.In this figure,what area equals the producer surplus?

-The above figure shows a labor market with a minimum wage of $8 an hour.The value of the resources workers are willing to use in their job search equals the distance between point ________ and point ________.

To keep the price at the level set by a price support,the government must

Suppose the government imposes a price support that is above the equilibrium price.As a result,

A price ceiling is

Rent (dollars per month) Quantity demanded (housing units) Quantity supplied 1,000 150 350 900 200 300 800 250 250 700 300 200 600 350 150 -The table above gives the demand and supply schedules for the housing market in a small town.If a rent ceiling of $600 a month is imposed,what is the quantity demanded,the quantity supplied,and the shortage of housing?

-The above figure shows the market for winter jackets.In an effort to keep the nation warm,the president places a price ceiling of $100 in the market for winter jackets.What would be the maximum price someone would pay in the black market?

-The above figure shows the domestic market for tomatoes.Suppose this market is isolated from global competition and there is a support price set at $16.In this figure,what area equals the consumer surplus?

Why would an increase in the minimum wage to $15 per hour lead to more unemployment for teenage and low-skilled workers?

Assuming that the rent ceiling is strictly enforced so that there is no black market,which of the following statements about a housing market with a rent ceiling set below the equilibrium rent is correct?