Economics Chapter 5 Multiple Choice Figure The Market For Hybrid

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106. Multiple Choice: If the minimum wage is a binding pric…

Question If the minimum wage is a binding price floor, then:

107. Multiple Choice: Figure: The Market for English Textbo...

Question Figure: The Market for English Textbooks

Reference: Ref 5-15

(Figure: The Market for English Textbooks) Look at the figure The Market for

English Textbooks. With a binding price floor at $90 in the market, the market

outcome would be:

Points: 0

108. Multiple Choice: Figure: The Market for Milk Reference…

Question Figure: The Market for Milk

Reference: Ref 5-16

(Figure: The Market for Milk) Look at the figure The Market for Milk. If there were a

binding price floor in the market for milk, the price could be equal to ________,

consumers would demand ________, and producers would supply ________.

P3; Q3; Q1

109. Multiple Choice: Figure: The Market for Tortillas Refe…

Question

Points: 0

Figure: The Market for Tortillas

Reference: Ref 5-17

(Figure: The Market for Tortillas) Look at the figure The Market for Tortillas. If there

is a nonbinding price floor in the market for tortillas, the price could be equal to

________, where consumers would demand ________, and producers would

supply ________.

Answer P1; Q1; Q3

110. Multiple Choice: Figure: The Market for Spanish Textbo…

Question

Points: 0

Figure: The Market for Spanish Textbooks

Reference: Ref 5-18

(Figure: The Market for Spanish Textbooks) Look at the figure The Market for

Spanish Textbooks. Suppose the government believes the producers of Spanish

textbooks are not profitable and it wants to make sure textbook producers are

profitable. It could impose a price control called a ________ and, to be binding, one

possible price would be ________.

price ceiling; $90

111. Multiple Choice: A price floor is a ________ set _____…

Question A price floor is a ________ set ________ the equilibrium price.

Answer minimum price; at

112. Multiple Choice: A price floor in the market for wheat:

Points: 0

Question A price floor in the market for wheat:

does not change the price received by farmers.

113. Multiple Choice: A price that the government guarantee…

Question A price that the government guarantees farmers will receive for a particular crop is:

Answer a price ceiling.

114. Multiple Choice: Figure: Supply and Demand in Agricult...

Question Figure: Supply and Demand in Agriculture

Reference: Ref 5-19

(Figure: Supply and Demand in Agriculture) Look at the figure Supply and Demand

in Agriculture. If the equilibrium price for wheat is as shown in the graph, how could

the government help increase farmers‘ income?

Points: 0

115. Multiple Choice: Figure: Supply and Demand in Agricult...

Question Figure: Supply and Demand in Agriculture

Reference: Ref 5-19

(Figure: Supply and Demand in Agriculture) Look at the figure Supply and Demand

in Agriculture. If a price floor at P4 is set to help improve farm incomes and the

government wants to assure farmers that their output will be purchased, the

government would have to purchase an amount of output equal to:

Q1 – Q3.

116. Multiple Choice: An agricultural market price support ...

Question An agricultural market price support policy establishes a price floor, which:

Answer decreases the price paid by consumers.

Points: 0

117. Multiple Choice: Figure: Price Controls Reference: Ref…

Question Figure: Price Controls

Reference: Ref 5-20

(Figure: Price Controls) Look at the figure Price Controls. In this graph, a price floor

has been imposed at the price shown as point b. The area of deadweight loss that

results from this price floor is:

efg.

118. Multiple Choice: The persistent unwanted surplus that …

Question The persistent unwanted surplus that results from a price floor creates

inefficiencies that include all of the following except:

the temptation to break the law by selling below the legal price.

119. Multiple Choice: In Europe, the minimum wage has led t...

Points: 0

Question In Europe, the minimum wage has led to all of the following except:

Answer high unemployment, especially among young workers.

120. Multiple Choice: A binding price floor causes:

Question A binding price floor causes:

Answer a shortage in the market.

121. Multiple Choice: Suppose that a binding price floor is…

Question Suppose that a binding price floor is in place in a particular market. If the market is

deregulated and the price floor is removed, which of the following effects could

occur?

Answer The quantity demanded would decrease and the quantity supplied would

increase.

122. Multiple Choice: One of the consequences of the minimu...

Question One of the consequences of the minimum wage has been:

Answer decreased unemployment for low-skill workers.

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123. Multiple Choice: Price controls:

Question Price controls:

Answer always increase economic efficiency.

124. Multiple Choice: Producers may supply a good with an i...

Question Producers may supply a good with an inefficiently high quality if the government

imposes:

Answer a price control.

125. Multiple Choice: In Europe the minimum wage has led to:

Question In Europe the minimum wage has led to:

Answer lower unemployment, especially among young workers.

126. Multiple Choice: A price floor is likely to cause dead...

Question A price floor is likely to cause deadweight loss because:

Answer buyers incur additional search costs looking for the scarce good.

Points: 0

127. Multiple Choice: Which is not an inefficiency caused b…

Question Which is not an inefficiency caused by price floors?

illegal activity

128. Multiple Choice: Figure: The Market for Hybrid Cars Re…

Question Figure: The Market for Hybrid Cars

Reference: Ref 5-21

(Figure: The Market for Hybrid Cars) Look at the figure The Market for Hybrid Cars.

What area represents consumer surplus if there is a binding price floor at P1?

Points: 0

a + b + d

129. Multiple Choice: Figure: The Market for Hybrid Cars Re…

Question Figure: The Market for Hybrid Cars

Reference: Ref 5-21

(Figure: Market for Hybrid Cars) Look at the figure The Market for Hybrid Cars.

What area represents deadweight loss if there is a binding price floor at P1?

Answer a + b + c

130. Multiple Choice: Figure: Price Controls Reference: Ref…

Question

Points: 0

Figure: Price Controls

Reference: Ref 5-22

(Figure: Price Controls) Look at the graph Price Controls. An effective price floor

would be at price ________ and a ________ would result of the difference between

points________.

Answer c; surplus; f and e

131. Multiple Choice: Figure: Price Controls Reference: Ref…

Question Figure: Price Controls

Reference: Ref 5-22

(Figure: Price Control) Look at the graph Price Controls. The consumer surplus lost

due to a price floor at point b is equal to the area:

Answer abe.

Points: 0

132. Multiple Choice: The system of taxicab medallions in N...

Question The system of taxicab medallions in New York City is an example of a

Answer price ceiling.

133. Multiple Choice: When the government policy is to regu...

Question When the government policy is to regulate the quantity of a good that can be

bought and sold rather than the price at which it is transacted, it uses a

price floor

134. Multiple Choice: A quota is

Question A quota is

Answer a lower limit on the quantity of a good that can be bought or sold.

135. Multiple Choice: The total amount of the good that can...

Question The total amount of the good that can be transacted under a quantity control is

called the

Points: 0

Answer ceiling price.

136. Multiple Choice: Which of the following is an example ...

Question Which of the following is an example of a quantity control?

Answer the Medicare reimbursement schedule for physicians.

137. Multiple Choice: When the government imposes a limit o...

Question When the government imposes a limit on sales of a good or service by a quota, it

usually issues a license that gives the owner the right to sell a given quantity of the

good. The market price of the license is equal to:

Answer the demand price of the good.

138. Multiple Choice: If New York City had no medallion sys...

Question If New York City had no medallion system for taxicabs, the price of a taxicab ride

would:

Answer increase because of the higher safety hazards.

Points: 0

139. Multiple Choice: Suppose the U.S. government imposes a...

Question Suppose the U.S. government imposes a binding quota on the number of

Japanese-made cars allowed into the United States. We would expect the price of

Japanese cars to ________ and the price of U.S.-made cars to ________.

decrease; decrease

140. Multiple Choice: The quota rent refers to:

Question The quota rent refers to:

the minimum rent that the owner of a building must receive before he or she is

willing to rent out the building.

141. Multiple Choice: Figure: The Market for Clams Referenc…

Question

Points: 0

Figure: The Market for Clams

Reference: Ref 5-23

(Figure: The Market for Clams) Look at the figure The Market for Clams. The

government imposes a quota limiting sales of clams to 1,000 pounds. According to

the figure, the quota rent per pound in this case is:

Answer $7.50.

142. Multiple Choice: Reference: Ref 5-24 (Table: Market f...

Question

Reference: Ref 5-24

(Table: Market for Fried Twinkies) Look at the table Market for Fried Twinkies.

Suppose the government decides to reduce fried Twinkie consumption as part of a

“war on obesity.” After careful study, the government decides to limit production

(i.e., the government imposes a quota on production) of fried Twinkies to 5,000 for

the current calendar year. Using the table, what price will producers charge if they

obey the quota law?

Answer $1.20

Points: 0

143. Multiple Choice: Reference: Ref 5-24 (Table: Market f...

Question

Reference: Ref 5-24

(Table: Market for Fried Twinkies) Look at the table Market for Fried Twinkies.

Using the table, if the government imposes a quota on the fried Twinkie market of

5,000, the quota rent (per fried Twinkie) collected by the fried Twinkie producers will

be:

Answer $1.20.

144. Multiple Choice: Table: The Market for Taxi Rides Refe…

Question

Points: 0

Table: The Market for Taxi Rides

Reference: Ref 5-25

(Table: The Market for Taxi Rides) Look at the table The Market for Taxi Rides. If a

government quota limit at 6 million rides is imposed on this market, the quota rent

accruing to the owner of a taxi medallion will be ________, but there will be a

missed opportunity (inefficiency) to consumers of ________.

Answer $1 per ride; 1 million rides

145. Multiple Choice: Table: The Market for Taxi Rides Refe…

Question

Points: 0

Table: The Market for Taxi Rides

Reference: Ref 5-25

(Table: Market for Taxi Rides) Look at the table The Market for Taxi Rides. If a

government quota limit at 9 million rides is imposed on this market, the quota rent

that will accrue to the owner of a taxi medallion will be ________, but there will be

a missed opportunity (inefficiency) to consumers of ________.

$4 per ride; 4 million rides

146. Multiple Choice: Table: The Market for Taxi Rides Refe…

Question

Points: 0

Table: The Market for Taxi Rides

Reference: Ref 5-25

(Table: Market for Taxi Rides) Look at the table The Market for Taxi Rides. If a

government quota limit at 7 million rides is imposed on this market, the quota rent

that will accrue to the owner of a taxi medallion will be ________, but there will be

a missed opportunity (inefficiency) to consumers of ________.

Answer $1 per ride; 1 million rides

147. Multiple Choice: If the government imposes a limit on ...

Question If the government imposes a limit on sales of a good or service by issuing a license

that gives the owner the right to sell a given quantity of the good, the difference

between the demand and supply price is:

Answer the quota rent.

148. Multiple Choice: The difference between the demand pri...

Question The difference between the demand price and the supply price at the quota limit is:

Points: 0