Exam 7: Government Actions in Markets

In the market for cotton, suppose the equilibrium price is $10 per ton and the equilibrium quantity is 100 tons.If the government then imposes a price support of $20 per ton,

-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?

-The above figure shows the domestic market for wheat.Suppose this market is isolated from global competition and the government intervenes by setting a support price of $15 a ton.The quantity produced once the price support is in place is

A price ceiling

Suppose the equilibrium rent in Boston is $1,500.A rent ceiling of $1,600 per month leads to

-The above figure shows a labor market with minimum wage equal to $16.In this figure, what area equals the firms' surplus?

A price support directly sets the

A price ceiling is a government regulation that makes it illegal to charge a price

A price ceiling is

A price support leads to inefficiency because

-The figure above shows the labor market in a region.In which of the following cases would the amount of unemployment be the largest?

Black markets occur when price ceilings are imposed in a market.Which of the following explains why sellers participate in a black market?

In a housing market with a rent ceiling set below the equilibrium rent,

A rent ceiling below the equilibrium rent

An efficient allocation of labor occurs when the

A rent ceiling set below the equilibrium rent

When a price support is set below the equilibrium price, producers ________ the quantity supplied and consumers ________ the quantity demanded.

-A price floor is

A minimum wage increases unemployment by

A price support set above the equilibrium price does which of the following? I∙decreases producer surplus Ii∙decreases consumer surplus Iii∙decreases the marginal cost of the last unit produced