Chapter 5

Question 1

A quantity control on milk production is a——-. It is set.——— the equilibrium quantity.

Answer 1

Quota, below

Question 2

The market for oranges is an equilibrium at a price of two dollars per pound. If the government imposes a price ceiling on oranges of one dollar per pound.

Answer 2

There will be an excess demand for the good

Question 3

In economic markets, a quota is a

Answer 3

Upper limit on quantity of a good that can be bought or sold

Question 4

Governments continue to impose price controls. Which statement is a valid explanation for this

Answer 4

People fear that prices will change dramatically if price controls are removed

Question 5

Suppose the national football league wants to enable all football fans to attend super bowl games. The league their fourth at the price of a Super Bowl ticket below what is generally considered a fair market price. Suppose the price of a ticket for a regular seat at the Super Bowl is set at just $500. People have tickets however can turn around and sell them online for 2500 each or more if there are transaction costs associated with online sales of Super Bowl tickets the true cost of a fan attending the Super Bowl is:

Answer 5

At least $2500

Question 6

Economic theory, predicts that, if New York City, I had no medallion system for taxi cabs, the price of a taxi cab ride would

Answer 6

Decreased from its current level

Question 7

A quarter limit that is below the market equilibrium quantity results in

Answer 7

I demand price that exceeds the supply price

Question 8

The New York Philharmonic wants to make sure that it’s concerts are available to all residents of and visitors to New York City and therefore prices of all it’s tickets are $75. However, outside Lincoln Center people can sell the same tickets for 250 or more the true cost to the concert goer of a ticket to the symphony is at least.

Answer 8

$250

Question 9

If a price ceiling and a price for you, the same quantity restriction, the deadweight loss caused by the price ceiling will be—— the deadweight caused by the price floor

Answer 9

Equal to

Question 10

New York City many apartments have a maximum allowable rent that landlords can charge per unit a rent control scheme that sets the maximum allowable rent at a price below. The equilibrium rental price would most likely be supported by.

Answer 10

People who wish to rent an apartment

Question 11

Suppose the American government imposes a binding quota on the number of German made cars allowed into the United States. Assuming that German made cars and American made cars are substitutes in consumption. We would expect the price of German cars to.—— and the price of American made cars to——-.

Answer 11

Increase, increase 

Question 12

Supposed to demand equation is given by P = 100-3Q and the supply is given by P=20+2Q. If the quantity bought and sold under price floor is Q is equal to 10. What is the deadweight loss associated with this quantity control?

Answer 12

Two hundred dollars

Question 13

The difference between demanded price and the supply price at the quota limit is the

Answer 13

Quota rent

Question 14

If the government sets a maximum allowable rent that is above the equilibrium rental state, then the

Answer 14

Law will have no effect on the rental market

Question 15

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

Answer 15

Licensing suppliers of the good

Question 16

All else equal, if a price floor above the equilibrium price is imposed on the market, and the government buys the surplus, consumer surplus will ——, and producer surplus will ——-.

Answer 16

Fall, rise

Question 17

Assume that Californian, an Italian wines are substitutes in consumption. If the American government imposes a quote on the amount of Italian wines allowed into the United States, with the quota, sat at a quantity below, the equilibrium quantity, the price of Italian wines in the United States well.——-well the price of California and produced wine will———

Answer 17

Increase, increase

Question 18

Which of these is a quantity control?

Answer 18

Limit on the number of card that can be caught in the north Atlantic ocean

Question 19

A price ceiling is

Answer 19

A maximum price sellers can charge for a good or service

Question 20

Which of these would illustrate a price floor

Answer 20

The minimum wage