Exam 5: Price Ceilings and Floors

A price ceiling is a(n):

Suppose that supply is fixed at 100 units and demand is Q = 500 - P.A price ceiling of $100 creates a shortage of 400 units.

When the maximum legal price is below the market price we say that there is a price:

The influence of the minimum wage in the American economy is very small because MOST workers earn:

Use the following to answer questions Figure: Price Ceilings and Consumer Surplus -(Figure: Price Ceilings and Consumer Surplus)Refer to the figure.There is a price ceiling of $20.What is the value of consumer surplus if all units of the good are allocated to the highest valued uses?

If,under price control,quantity supplied equals 50 units and quantity demanded equals 40 units,then the price control is a __________.

Price floors set above equilibrium encourage quality waste and wasteful lines.

Figure: Supply and Demand 1 Refer to figure.If,in this figure,the government enacts a price ______ by setting the good's price at $6,it will create a ______.

Rent control in New York City has resulted in:

In the case of a binding price ceiling,the price paid in the market will be:

The lower the price ceiling is relative to the market equilibrium price,the:

From an efficiency standpoint,rent controls:

Figure: Allocating Goods under Price Ceilings Refer to the figure.Using the information provided in the graph,answer the following questions: a.If the goods were allocated only to those users who had the highest-value uses,find the total dollar amount of consumer surplus. b.If the goods are allocated randomly between the high-value uses and the low-value uses,then what is the average value of the good? c.If goods are allocated randomly,what is the total dollar amount of consumer surplus?

The BEST way to help the poor afford housing is by:

Which statement(s)is TRUE? I.Price floors are legally established minimum prices for goods and services. II.Price floors create surpluses,whereas price ceilings create shortages. III.Price floors reduce quality of goods and services.

Which observation would be consistent with the impact of price ceilings?

Rent controls are typically implemented as a means of helping low-income families afford housing.Is this a good way to help poor families in general? Explain why or why not.

In your city,it is illegal to charge more than a certain amount of money for an apartment.People have been signing leases for the highest legal amount,but also agreeing to pay a monthly bribe "on the side" to their landlord in order to get the apartment in the first place and to get timely maintenance.What is the effect of the bribes?

Use the following to answer question Figure: Supply and Demand 3 -Do price ceilings misallocate resources?

The higher the minimum wage is above the equilibrium wage,the: