Econ Final Review: Assignment 6

When a government mandate sets the rental price of an apartment below the market clearing level, which of the following result?

a shortage

According to your textbook, the current war on drugs in the United States has similar consequences to the earlier prohibition on alcohol. The similar consequences include

a. an underground supply and demand process. b. the production of more powerful and dangerous forms of the illegal products. c. production and distribution being controlled by people with a comparative advantage in crime d. all of the above.

An effective price ceiling tends to

a. decrease quantity supplied. b. increase quantity demanded. c. discoordinate the plans of buyers and sellers. d. do all of the above.

An effective price floor tends to

a. increase quantity demanded. b. decrease quantity supplied. c. leave quantity supplied and demanded unchanged. d. do none of the above.

If the government imposes a ceiling price on apartment rents, we would expect to observe all of the following except one. Which is the exception?

an increase in the number of new rental apartment complexes being built

According to your textbook authors, the prohibition on alcohol kept the ________ curve relatively stable while the ________ curve became more ________.

demand; supply; inelastic

If a price ceiling on gasoline is set above the market-clearing price, then

e. none of the above will occur.

According to your textbook, efforts to free Sudanese slaves by buying them in the open market actually

increased demand for slaves, which increased slave prices and increased the size of the slave market.

Which of the following is correct when a price floor is set above the equilibrium price?

quantity supplied exceeds quantity demanded at the set price

The high pay of professional basketball players

reflects the limited supply of basketball talent and the growing demand for that talent

Suppose a market is in equilibrium and then a price floor is established below the equilibrium price. Which of the following will happen?

the market will remain in equilibrium

Suppose the market-clearing price of wheat is $2.6 per bushel. What would happen if wheat farmers persuaded the government to set a legally-mandated price support of $3.35 per bushel?

the quantity demanded of wheat would fall

Suppose the market clearing rent is $1400 per month, but a rent control is established at $1200 per month. Which is most likely to emerge?

the quantity of apartments demanded would exceed quantity supplied.