Question 1

Use the following to answer questions:
Figure: Price Ceiling  
-(Figure: Price Ceiling) Refer to the figure. If a price ceiling were set at $12, there would be a:

Accepted Answer

A)  shortage of 50 units. 
B)  surplus of 40 units. 
C)  shortage of 0 units. 
D)  surplus of 20 units. 
A)  shortage of 50 units. 
B)  surplus of 40 units. 
C)  shortage of 0 units. 
D)  surplus of 20 units.

Question 2

Which statement(s) is NOT true?
I. The increase in the minimum wage in Puerto Rico in 1938 did not affect Puerto Rico's unemployment rate.
II. About 15% of all hourly workers in the United States earn the minimum wage.
III. Raising the minimum wage is an effective method to combat poverty.
IV. Raising the minimum wage decreases employment of low-skilled workers.

Accepted Answer

A)  I and II only 
B)  II and III only 
C)  I and IV only 
D)  IV only 
A)  I and II only 
B)  II and III only 
C)  I and IV only 
D)  IV only

Question 3

Use the following to answer questions:
Figure: Supply and Demand 2  
-(Figure: Supply and Demand 2) If the government sets the price at $8 in this figure, the total value of the wasted time is:

Accepted Answer

A)  $36. 
B)  $48. 
C)  $64. 
D)  $8. 
A)  $36. 
B)  $48. 
C)  $64. 
D)  $8.

Question 4

Which of the following statements is TRUE?

Accepted Answer

A)  A price ceiling is the minimum price allowed by law. 
B)  An increase in market demand does not lead to an increase in quantity supplied under a price ceiling. 
C)  A shortage occurs whenever the price is set above the equilibrium price. 
D)  When quantity supplied exceeds quantity demanded, the market experiences a shortage. 
A)  A price ceiling is the minimum price allowed by law. 
B)  An increase in market demand does not lead to an increase in quantity supplied under a price ceiling. 
C)  A shortage occurs whenever the price is set above the equilibrium price. 
D)  When quantity supplied exceeds quantity demanded, the market experiences a shortage.

Question 5

Price floors and price ceilings both result in lost gains from trade and decreases in the quality of the product.

Accepted Answer

A) True 
 B)False

Question 6

Rent controls have five important effects on the market for apartments. Please list and provide an example of each effect.

Accepted Answer

1) Shortage: Since the rent-controlled p

Question 7

Under a binding price ceiling, one expects the quality of a good to:

Accepted Answer

A)  rise. 
B)  remain the same. 
C)  fall. 
D)  change in an indeterminate direction. 
A)  rise. 
B)  remain the same. 
C)  fall. 
D)  change in an indeterminate direction.

Use the following to answer questions: Figure: Price Ceiling -(Figure: Price Ceiling) Refer to the figure. If a price ceiling were set at $12, there would be a:

Use the following to answer questions: Figure: Supply and Demand 2 -(Figure: Supply and Demand 2) If the government sets the price at $8 in this figure, the total value of the wasted time is:

Which of the following statements is TRUE?

Price floors and price ceilings both result in lost gains from trade and decreases in the quality of the product.

Rent controls have five important effects on the market for apartments. Please list and provide an example of each effect.

Under a binding price ceiling, one expects the quality of a good to:

The Big Ideas

The Power of Trade and Comparative

Supply and Demand

Equilibrium

Elasticity and Its Applications

Taxes and Subsidies

The Price System

International Trade

Externalities- When the Price Is Not Right

Costs and Profit Maximization Under Competition

Competition and the Invisible Hand

Monopoly

Price Discrimination

Oligopoly and Game Theory

Competing for Monopoly

Monopolistic Competition and Advertising

Labor Markets

Public Goods and the Tragedy of the Commons

Political Economy and Public Choice

Economics, Ethics, and Public Policy

Managing Incentives

Stock Markets and Personal Finance

Price Discrimination

Consumer Choice

Filters

Exam 8: Price Ceilings and Floors

Use the following to answer questions: Figure: Price Ceiling -(Figure: Price Ceiling) Refer to the figure. If a price ceiling were set at $12, there would be a:

Use the following to answer questions: Figure: Supply and Demand 2 -(Figure: Supply and Demand 2) If the government sets the price at $8 in this figure, the total value of the wasted time is:

Which of the following statements is TRUE?

Price floors and price ceilings both result in lost gains from trade and decreases in the quality of the product.

Rent controls have five important effects on the market for apartments. Please list and provide an example of each effect.

Under a binding price ceiling, one expects the quality of a good to:

The Big Ideas

The Power of Trade and Comparative

Supply and Demand

Equilibrium

Elasticity and Its Applications

Taxes and Subsidies

The Price System

International Trade

Externalities- When the Price Is Not Right

Costs and Profit Maximization Under Competition

Competition and the Invisible Hand

Monopoly

Price Discrimination

Oligopoly and Game Theory

Competing for Monopoly

Monopolistic Competition and Advertising

Labor Markets

Public Goods and the Tragedy of the Commons

Political Economy and Public Choice

Economics, Ethics, and Public Policy

Managing Incentives

Stock Markets and Personal Finance

Price Discrimination

Consumer Choice

Filters