ECON 4

Refer to the graph above. Suppose the good shown is being sold at the $6 price ceiling. At a quantity of 75 units, what is the maximum per-unit price buyers would be willing to pay for a good "tied" to the good shown in the graph? $10 $6 $8 $4

$4

Refer to the table above. Suppose that the government imposes a price ceiling at a price of $15. The number of units that would be exchanged in this market would be 170, since that is the average of the quantity demanded and the quantity supplied at the price ceiling. 260, since that is the number of units supplied at the price ceiling. 150, since that is the equilibrium quantity, and the price ceiling is above the equilibrium price. 80, since that is the number of units demanded at the price ceiling.

150, since that is the equilibrium quantity and the price ceiling is above the equilibrium price.

Refer to the graph above. How many fewer units are exchanged because of the price ceiling than would have been exchanged at the equilibrium price? 65 60 100 50

50

Refer to the graph above. The number of units exchanged at the price ceiling is 125 75 100 175

75

Refer to the table above. Suppose that the government imposes a price ceiling at a price of $10. The number of units that would be exchanged in this market would be 90, since that is the number of units supplied at the price ceiling (and the quantity supplied is less than the quantity demanded). 150, since that is the equilibrium quantity and the price ceiling is below the equilibrium price. 155, since that is the average of the quantity demanded and the quantity supplied at the price ceiling. 220, since that is the number of units demanded at the price ceiling (and the quantity demanded is greater than the quantity supplied).

90, since that is the number of units supplied at the price ceiling (and the quantity supplied is less than the quantity demanded).

At the minimum wage (set above the equilibrium wage), none of the individuals who end up working are paid more than if they were paid the equilibrium wage. You Answered none of the workers will lose there jobs or find themselves working fewer hours. Answer there will be fewer people working (or fewer labor hours demanded) than at the equilibrium wage. all individuals who end up working are paid less than if they were paid the equilibrium wage.

Answer there will be fewer people working (or fewer labor hours demanded) than at the equilibrium wage.

Which of the following statement is false based on information presented in the textbook (and the video lecture)? In the market for transplanted kidneys the legal price is the same as the equilibrium price. There is evidence of a shortage in the market for kidneys (for transplants). The waiting list for transplanted kidneys is used as a non-price rationing device. There is a price ceiling in the market for transplanted kidneys at a price of $0.

In the market for transplanted kidneys the legal price is the same as the equilibrium price.

Suppose the government imposes a price ceiling above the equilibrium price of a given good. Which of the following is the most likely result? Some other rationing devices will emerge to allocate the good among buyers. Some buyers and sellers will be willing to risk breaking the law in order to exchange the good at a price above the equilibrium price since there would be a shortage of the good at the price ceiling. Brute force will be used to allocate the good among buyers. No change will occur in the market.

No change will occur in the market.

Refer to the graph above. Suppose that wheat producers lobby the government for a price floor and receive one. This price floor is set at PF. What has happened to the producers' surplus as a result of the imposition of the price floor? Producers' surplus has fallen by (area 4 + 5) Producers' surplus has changed by (area 2 - area 5) Producers' surplus has changed by (area 3 - area 5) Producers' surplus has risen by (area 2 + 3)

Producers' surplus has changed by (area 2 - area 5)

Refer to the graph above. Suppose that wheat producers lobby the government for a price floor and receive one. This price floor is set at PF. What is the change in the total surplus at the price floor, compared to at the equilibrium price? There was a gain in total surplus equal to (area 1 + 2 + 3 + 4 + 5) There was a gain in total surplus equal to (area 1 + 2 + 3) There was a loss in total surplus equal to (area 4 + 5 + 6 ) There was a loss in total surplus equal to (area 4 + 5)

There was a loss in total surplus equal to (area 4 + 5)

Suppose you live in New York City and the government has imposed price ceilings on apartment rental rates. You want to rent an apartment from Smith, who says that unless you buy the furniture in the apartment for $4,000, he cannot rent the apartment to you. The condition of buying the furniture could be considered to be something no renter would agree to. a price ceiling. a price floor. a tie-in sale.

a tie-in sale.

Refer to the graph above. If the wheat market is in competitive equilibrium, the consumers' surplus will equal area 1 + 2 + 3 + 4 + 5 area 1 + 2 + 3 area 1 + 2 + 4 area 3 + 5

area 1 + 2 + 4

Refer to the graph above. Suppose that wheat producers lobby the government for a price floor and receive one. This price floor is set at PF. What has happened to the consumers' surplus as a result of the imposition of the price floor? consumers' surplus has risen by (area 2 + 3) consumers' surplus has gone down by (area 2 + 4) consumers' surplus has risen by (area 2 + 4) consumers' surplus has gone down by (area 3 - area 5)

consumers' surplus has gone down by (area 2 + 4)

A price ceiling is a government-mandated minimum price below which legal trades cannot be made. maximum price above which legal trades cannot be made. maximum price below which legal trades cannot be made. minimum price above which legal trades cannot be made.

maximum price above which legal trades cannot be made.

If the minimum wage law sets a price floor above the equilibrium wage in the market for unskilled labor, then the minimum wage will not impact the unskilled labor market. minimum wage will create a shortage of unskilled labor. unskilled labor market will change, but we cannot be certain how. minimum wage will create a surplus of unskilled labor.

minimum wage will create a surplus of unskilled labor.

Refer to the graph above. Suppose the minimum wage is set at $5. The result will be a shortage of unskilled labor. a prolonged surplus of unskilled labor. no impact on the unskilled labor market. unemployment.

no impact on the unskilled labor market.

The minimum wage is an example of a price ceiling price door price floor. price wall

price floor.

If goods are not rationed according to price, if follows that first-come-first-served will necessarily be the rationing device used in the market. some non-price rationing devices will be used to ration the goods. they won't get rationed at all. there will be surpluses in the market.

some non-price rationing device will be used to ration the goods.

Refer to the graph above. At a wage of $7, there will be a __________ of unskilled workers equal to ___________ thousand workers. surplus; 10 surplus; 20 shortage; 20 shortage; 10

surplus; 20

If the current market price of good Z is below the equilibrium price of good Z there is a shortage of good Z. it must be because the government has imposed a price ceiling in the market for good Z. there is a surplus of good Z. demand must necessarily decrease to restore equilibrium.

there is a shortage of good Z.