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Exam 5: Price Controls and Quotas: Meddling With Markets

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Question 21

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Use the following to answer question: Figure: The Shrimp Market -(Figure: The Shrimp Market) Look at the figure The Shrimp Market. If the government wants to limit shrimp sales to 500 pounds, it can impose a price:

A) floor of $15.
B) floor of $10.
C) ceiling of $10.
D) floor of $15 or ceiling of $10.

E) All of the above
F) C) and D)

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Question 22

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Use the following to answer questions: -(Table: The Market for Soda) Look at the table The Market for Soda. If the government imposes a price ceiling of $1 per can of soda, the quantity of soda supplied will be:

A) 7 cans.
B) 8 cans.
C) 9 cans.
D) 10 cans.

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

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Question 23

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

Use the following to answer question: -(Table: Market for Fried Twinkies) Look at the table The Market for Fried Twinkies. In response to popular anger over the high price of fried Twinkies and the extreme wealth of fried Twinkie producers, the government imposes a price ceiling of $1.20 per fried Twinkie. From this table, the price ceiling causes a _____ fried Twinkies.

A maximum price legislated by the government is called:

The demand price of a given quantity of doughnuts is the price at which consumers will demand that quantity. The supply price is the price at which doughnut producers will supply that quantity.

Use the following to answer questions: -(Table: Market for Fried Twinkies) Look at the table Market for Fried Twinkies. If the government imposes a quota of 5,000 on the fried Twinkie market, the quota rent per fried Twinkie will be:

Rent controls usually set a ceiling below the equilibrium price, and therefore:

The government might impose a price floor if _____ can make a strong moral or political argument for _____ prices.

Use the following to answer questions: Figure: Market I -(Figure: Market I) Look at the figure Market I. A price floor of $5 imposed on this market would:

An effective minimum wage ultimately means that:

A quota is the minimum amount of some good that can be bought and sold.

Suppose the state of Mississippi sets a price floor in the market for cotton. If the floor is set below the market-clearing price of cotton, the floor will cause a surplus of cotton.

A price ceiling will have NO effect if:

The amount that consumers are willing to pay for the quota limit quantity is the:

An effective price floor will lead to:

Suppose the market price of wheat is $7 a bushel and a price ceiling is set at $9 a bushel. What is the impact of this price ceiling?

Use the following to answer question: Figure: The Market for Clams -(Figure: The Market for Clams) Look at the figure The Market for Clams. The government imposes a quota limiting sales of clams to 1,000 pounds. According to the figure, the quota rent per pound in this case is:

Use the following to answer questions: -(Table: The Market for Hamburger Flippers) Look at the table The Market for Hamburger Flippers. If the minimum wage in this market is $8, what is the effect on the market? Who are the winners and losers?

When a tenant in a rent-controlled apartment sublets the apartment to another renter at a rent higher than the price ceiling: