no change to the market.
56. Multiple Choice: Figure: Supply and Demand Reference: ...
Question Figure: Supply and Demand
Reference: Ref 5-8
(Figure: Supply and Demand) Look at the figure Supply and Demand. In the market
shown in the figure, a binding price ceiling is represented by:
Answer the price P1.
57. Multiple Choice: The Atlanta Symphony wants to make su...
Question The Atlanta Symphony wants to make sure that its concerts are affordable for all
residents of Atlanta and therefore prices all its tickets at $25 each. However,
outside Symphony Hall, people can sell the same tickets for $75 or more. The true
cost to the concertgoer of a ticket to the symphony is at least:
Answer $25.
58. Multiple Choice: Producers may supply an inefficiently…
Question
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Producers may supply an inefficiently low quality of a good if the government
imposes:
Answer a price control.
59. Multiple Choice: If the government imposes rent contro…
Question If the government imposes rent control and it is binding:
Answer rent will be set above the equilibrium price.
60. Multiple Choice: Price ceilings that lead to shortages...
Question Price ceilings that lead to shortages will impose costs on society because they:
Answer will eliminate long waiting lines.
61. Multiple Choice: In a black market, goods or services ...
Question In a black market, goods or services are bought and sold:
Answer at night.
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62. Multiple Choice: When a tenant in a rent-controlled ap…
Question When a tenant in a rent-controlled apartment sublets the apartment to another
renter at a rent higher than the price ceiling:
Answer it is inefficient.
63. Multiple Choice: Black markets may develop with price ...
Question Black markets may develop with price controls because:
Answer price controls increase efficiency.
64. Multiple Choice: Which of the following is an example ...
Question Which of the following is an example of a black market?
the oil market
65. Multiple Choice: ________ market is a market in which …
Question ________ market is a market in which goods or services are bought and sold
illegally.
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An uncontrolled
66. Multiple Choice: One of the ways rent control is ineff…
Question One of the ways rent control is inefficient is that it leads to:
Answer higher–quality apartments.
67. Multiple Choice: Rent controls in New York City cause ...
Question Rent controls in New York City cause all of the following except:
Answer inefficiently low quality.
68. Multiple Choice: Price controls encourage black market...
Question Price controls encourage black markets because:
Answer they eliminate opportunity costs.
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69. Multiple Choice: Suppose the government of the oil-ric…
Question Suppose the government of the oil-rich country Saudi Arabia sets gasoline prices
at $0.25 per gallon when the market price is $1.50. The Saudi government’s actions
will:
Answer improve efficiency, since the low prices will force producers to find cheaper
production methods.
70. Multiple Choice: A price ceiling is likely to result in:
Question A price ceiling is likely to result in:
Answer a persistent surplus, a transfer of surplus from producers to consumers, and
deadweight loss.
71. Multiple Choice: Each of the following is a source of …
Question Each of the following is a source of inefficiency from a rent-control price ceiling
except:
Answer inefficiently low quantity of the good exchanged.
72. Multiple Choice: Which is not an inefficiency caused b…
Question Which is not an inefficiency caused by price ceilings?
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Answer inefficient allocation to consumers
73. Multiple Choice: Economists in general agree that rent…
Question Economists in general agree that rent controls are:
Answer an efficient and equitable way to help low–income families.
74. Multiple Choice: Governments continue to impose price …
Question Governments continue to impose price controls. Which of the following is not a
valid reason for this?
Answer Some people do benefit from such price controls.
75. Multiple Choice: Figure: Rent Controls Reference: Ref …
Question
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Figure: Rent Controls
Reference: Ref 5-9
(Figure: Rent Controls) Look at the figure Rent Controls. Without rent controls, the
equilibrium quantity is ________.
Answer Q4
76. Multiple Choice: Figure: Rent Controls Reference: Ref …
Question
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Figure: Rent Controls
Reference: Ref 5-9
(Figure: Rent Controls) Look at the figure Rent Controls. Suppose that rent controls
are imposed in the market. If the government wanted a rent control ceiling to be
effective immediately, what is one possible price to set?
Answer Rent3
77. Multiple Choice: Figure: Rent Controls Reference: Ref …
Question
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Figure: Rent Controls
Reference: Ref 5-9
(Figure: Rent Controls) Look at the figure Rent Controls. If rent controls are set at
Rent0, renters would be willing to pay a price at least as high as ________.
No one would be willing to pay a higher actual price than Rent0.
78. Multiple Choice: (Figure: Rent Controls) Look at the f…
Question (Figure: Rent Controls) Look at the figure Rent Controls. Without rent controls, the
equilibrium rent is ________ .
Answer Rent4
79. Multiple Choice: (Figure: Rent Controls) Look at the f…
Question
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(Figure: Rent Controls) Look at the figure Rent Controls. If rent controls are
imposed and the government wants them to be immediately effective, they will
most likely be set at either ________ or ________.
Rent2; Rent4
80. Multiple Choice: (Figure: Rent Controls) Look at the f…
Question (Figure: Rent Controls) Look at the figure Rent Controls. If rent controls are set at
Rent0:
Answer the shortage of rental units is the distance Q1 – Q3.
81. Multiple Choice: (Figure: Rent Controls) Look at the f…
Question (Figure: Rent Controls) Look at the figure Rent Controls. If rent controls are set at
Rent1:
there would be a surplus of rental units, but it is impossible to tell how large
the surplus is based on the information provided.
82. Multiple Choice: (Figure: Rent Controls) Look again at...
Question (Figure: Rent Controls) Look again at the figure Rent Controls. If rent controls are
set at Rent3:
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Answer the shortage of rental units is the distance Q3 – Q1.
83. Multiple Choice: (Figure: Rent Controls) Look at the f…
Question (Figure: Rent Controls) Look at the figure Rent Controls. If rent controls are set at
Rent1:
new apartments will be constructed.
84. Multiple Choice: The market for apples is in equilibri...
Question The market for apples is in equilibrium at a price of $0.50 per pound. If the
government imposes a price floor in the market at a price of $0.40 per pound, then:
Answer quantity demanded will decrease.
85. Multiple Choice: Reference: Ref 5-10 (Table: The Mark...
Question
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Reference: Ref 5-10
(Table: The Market for Soda) Look at the table The Market for Soda. If the
government imposes a price floor of $1.00 per can of soda, there will be:
Answer a shortage of 2 cans.
86. Multiple Choice: West African cotton farmers are very …
Question West African cotton farmers are very upset about the subsidies the U.S.
government pays to American cotton farmers. One reason for this could be that
subsidized cotton from the United States:
has led to an increase in the demand for West African cotton.
87. Multiple Choice: The United States and the European Un...
Question The United States and the European Union impose price floors on many
agricultural products. These price floors lead to unwanted surpluses. To deal with a
surplus:
Answer the U.S. government typically pays farmers to produce as much as possible.
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88. Multiple Choice: Reference: Ref 5-11 (Table: Market f…
Question
Reference: Ref 5-11
(Table: Market for Butter) Look at the figure Market for Butter. If the government
imposes a price floor of $0.90 per pound of butter, the quantity of butter actually
purchased will be:
Answer 10.5 million pounds.
89. Multiple Choice: Suppose the government sets a price f...
Question Suppose the government sets a price floor of $2.85 per bushel on corn when the
current price is $2.55. This price floor will:
increase the supply of corn.
90. Multiple Choice: Figure: Supply and Demand Reference: ...
Question
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Figure: Supply and Demand
Reference: Ref 5-12
(Figure: Supply and Demand) Look at the figure Supply and Demand. In the market
shown in the figure, a binding price floor is represented by:
point C.
91. Multiple Choice: All else equal, if a price floor that...
Question All else equal, if a price floor that is above the equilibrium price is imposed on a
market and the government buys the surplus, what will happen to consumer and
producer surplus?
Consumer surplus will rise and producer surplus will rise.
92. Multiple Choice: Figure: The Market for Butter Referen...
Question
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Figure: The Market for Butter
Reference: Ref 5-13
(Figure: The Market for Butter) Look at the figure The Market for Butter. The figure
represents a competitive market for butter. If a government price floor at $1.40 is
imposed on this market, an inefficiency will result in the form of a:
Answer surplus of 4.5 million pounds of butter.
93. Multiple Choice: Figure: The Market for Butter Referen...
Question
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Figure: The Market for Butter
Reference: Ref 5-13
(Figure: The Market for Butter) Look at the figure The Market for Butter. If a
government price floor at $1.30 is imposed on this market, an inefficiency will result
in the form of a:
shortage of 1.5 million pounds of butter.
94. Multiple Choice: Figure: The Market for Butter Referen...
Question
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Figure: The Market for Butter
Reference: Ref 5-13
(Figure: The Market for Butter) Look at the figure The Market for Butter. If a
government price floor at $1.10 is imposed on this market, an inefficiency will result
in the form of a:
Answer surplus of 4.5 million pounds of butter.
95. Multiple Choice: Which of the following is a reason fo...
Question Which of the following is a reason for governments imposing or maintaining price
controls?
Price controls improve the efficiency of the market.
96. Multiple Choice: If the government feels that the pric...
Question If the government feels that the price in the market is too low for the ________, it
can impose a ________.
Answer consumers; price ceiling
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97. Multiple Choice: To be binding, a price floor must be ...
Question To be binding, a price floor must be set at a price:
Answer lower than the equilibrium price.
98. Multiple Choice: When the minimum wage increases:
Question When the minimum wage increases:
Answer unemployment among skilled workers decreases.
99. Multiple Choice: Farmers in developing countries want …
Question Farmers in developing countries want the United States to reduce the subsidies
that it gives to American farmers because subsidized agricultural products from the
United States:
has led to an increase in the demand for agricultural products from the
developing world.
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100. Multiple Choice: When the government removes a binding...
Question When the government removes a binding price floor:
Answer quantity demanded will decrease and quantity supplied will increase.
101. Multiple Choice: A minimum price set above the equilib…
Question A minimum price set above the equilibrium price is a:
Answer demand price.
102. Multiple Choice: Suppose the government sets a price f…
Question Suppose the government sets a price floor below the current price of the good. This
price floor will:
Answer result in an excess supply of the good.
103. Multiple Choice: Figure: The Shrimp Market Reference: ...
Question
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Figure: The Shrimp Market
Reference: Ref 5-14
(Figure: The Shrimp Market) Look at the figure The Shrimp Market. If the
government wants to limit shrimp sales to 500 pounds, it could impose a:
Answer price floor of $15.
104. Multiple Choice: Which of the following is an example ...
Question Which of the following is an example of a price floor?
Answer a rent–controlled apartment
105. Multiple Choice: The likely result of a price floor is:
Question The likely result of a price floor is:
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