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Exam 4: Price Controls and Quotas: Meddling With Markets

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Question 71

Multiple Choice

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The government decides to impose a price ceiling on a good because it thinks that the market-determined price is too high.If it imposes the price ceiling above the equilibrium price:

A) consumers will respond to the higher price and therefore wish to purchase less of the good than at the equilibrium price.
B) producers will respond to the higher price and therefore offer fewer units for sale.
C) consumers will purchase less of the good after the price ceiling is imposed.
D) neither producers nor consumers will change their behaviour.

E) A) and C)
F) A) and D)

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Question 72

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The most likely reason that the government would implement a _____ is because it feels that the price is too low for _____.

A) price ceiling;consumers
B) price floor;consumers
C) price ceiling;producers
D) price floor;producers

E) All of the above
F) A) and B)

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Question 73

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Use the following to answer question : -(Figure: Supply and Demand) Use Figure: Supply and Demand.A binding price floor is represented by:

Use the following to answer questions: -(Table: The Market for Pop) Use Table: The Market for Pop.If the government imposes a price ceiling of $0.50 per can of pop the quantity of pop demanded will be _____ cans.

Which example would be considered a black market transaction?

Suppose that Canada and the European Union impose price floors on many similar agricultural products.These price floors lead to unwanted surpluses.To deal with a surplus:

The minimum wage,which sets a lower limit on the wages that workers can earn,is often above the equilibrium price.The minimum wage is an example of a(n) :

Use the following to answer questions: Figure: The Market for Butter -(Figure: The Market for Butter) Use Figure: The Market for Butter.If a government price floor of $1.30 is imposed on this market,an inefficiency will result in the form of a _____ of _____ million kilograms of butter.

Typically,the government limits the quantity of a good that can be bought and sold by:

Use the following to answer questions: -(Figure: Rent Controls) Use Figure: Rent Controls.Without rent controls,the equilibrium quantity is:

Use the following to answer question : -(Figure: The Market for Milk) Use Figure: The Market for Milk.With a binding price floor,the price could be equal to _____,consumers would demand _____,and producers would supply _____.

A binding price ceiling results in:

Use the following to answer questions: Figure: The Shrimp Market -(Figure: The Shrimp Market) Use Figure: The Shrimp Market.If the government imposes a quota limiting sales of shrimp to 250 kilograms,it will have the same effect on transactions as a price floor of:

The Montreal Symphony Orchestra wants to make sure that its concerts are affordable for all residents of Montreal and therefore prices all of its tickets at $25.However,outside Place des Arts (the concert hall where they play) ,people can sell the same tickets for $75 or more.The true cost to the concert-goer of a ticket to the symphony is at least:

By definition,in a black market,goods or services are bought and sold:

In Europe,the minimum wage has led to:

A binding rent-control price ceiling does NOT result in:

One of the ways rent control is inefficient is that it leads to:

Use the following to answer questions: -(Figure: Rent Controls) Use Figure: Rent Controls.If rent controls are set at Rent₁:

Suppose that the Jamaican government sets coffee prices at $1 per kilogram when the market price is $10 per kilogram.The government's actions will: