Question 1

Figure 6-8 
-Refer to Figure 6-8.If the government imposes a price ceiling of $2 on this market,then there will be

Accepted Answer

At a price of $2, the quantity demanded is 80 units while the quantity supplied is only 20 units, resulting in a shortage of 60 units (80 - 20 = 60). Therefore, choice C is correct.

Question 2

Figure 6-7 
-Refer to Figure 6-7.Suppose a price floor of $7 is imposed on this market.As a result,

Accepted Answer

The answer of Figure 6-7 
-Refer to Figure 6-7.Suppose a...

Question 3

Figure 6-7 
-Refer to Figure 6-7.Which of the following price controls would cause a surplus of 20 units of the good?

Accepted Answer

If a price floor of $7 is set, it will be above the equilibrium price of $5, causing a surplus of 20 units (quantity supplied - quantity demanded = 80 - 60 = 20). This is because the price floor will mandate that the price be no lower than $7, but at that price, consumers will only demand 60 units, leaving 20 units unsold. The other options would either have no effect on the market or cause a shortage.

Question 4

Figure 6-7 
-Refer to Figure 6-7.For a price ceiling to be binding in this market,it would have to be set at

Accepted Answer

The answer of Figure 6-7 
-Refer to Figure 6-7.For a...

Question 5

Figure 6-9 
-Refer to Figure 6-9.A price floor set at

Accepted Answer

The answer of Figure 6-9 
-Refer to Figure 6-9.A price...

Question 6

Figure 6-7 
-Refer to Figure 6-7.For a price floor to be binding in this market,it would have to be set at

Accepted Answer

The answer of Figure 6-7 
-Refer to Figure 6-7.For a...

Question 7

Figure 6-8 
-Refer to Figure 6-8.The price of the good would continue to serve as the rationing mechanism if

Accepted Answer

The answer of Figure 6-8 
-Refer to Figure 6-8.The price...

Question 8

Figure 6-9 
-Refer to Figure 6-9.At which price would a price floor be binding?

Accepted Answer

The answer of Figure 6-9 
-Refer to Figure 6-9.At which...

Question 9

Figure 6-7 
-Refer to Figure 6-7.Which of the following price controls would cause a shortage of 20 units of the good?

Accepted Answer

The answer of Figure 6-7 
-Refer to Figure 6-7.Which of...

Question 10

Figure 6-10 
-Refer to Figure 6-10.A price ceiling set at

Accepted Answer

The answer of Figure 6-10 
-Refer to Figure 6-10.A price...

Question 11

Figure 6-8 
-Refer to Figure 6-8.If the government imposes a price floor of $5 on this market,then there will be

Accepted Answer

A price floor of $5 means that the price cannot fall below $5. At this price, there is excess supply, meaning that there is a surplus of the good. The quantity demanded is 20 units, while the quantity supplied is 50 units. Therefore, there is a surplus of 30 units of the good.

Question 12

Figure 6-6 
-Refer to Figure 6-6.If the government imposes a price floor of $6 on this market,then there will be

Accepted Answer

The answer of Figure 6-6 
-Refer to Figure 6-6.If the...

Question 13

Figure 6-7 
-Refer to Figure 6-7.Suppose a price ceiling of $5 is imposed on this market.As a result,

Accepted Answer

With a price ceiling of $5, the quantity demanded increases to 40, which is less than the initial quantity supplied. As a result, there is excess supply in the market, and buyers' cannot purchase all the goods they want. The effect of the price ceiling is to reduce buyers' total expenditure on the good by the amount of the decrease in the quantity of the good supplied times the price ceiling (20 units x $5 = $100). Therefore, C is the correct answer. A, B, and D are incorrect statements.

Question 14

Figure 6-9 
-Refer to Figure 6-9.At which price would a price ceiling be binding?

Accepted Answer

The answer of Figure 6-9 
-Refer to Figure 6-9.At which...

Question 15

Figure 6-6 
-Refer to Figure 6-6.If the government imposes a price floor of $14 on this market,then there will be

Accepted Answer

The answer of Figure 6-6 
-Refer to Figure 6-6.If the...

Question 16

Figure 6-8 -Refer to Figure 6-8.When a certain price control is imposed on this market,the resulting quantity of the good that is actually bought and sold is such that buyers are willing and able to pay a maximum of P₁ dollars per unit for that quantity and sellers are willing and able to accept a minimum of P₂ dollars per unit for that quantity.If P₁ - P₂ = $3,then the price control is

Accepted Answer

The answer of Figure 6-8 
-Refer to Figure 6-8.When a...

Question 17

Figure 6-9 
-Refer to Figure 6-9.At which price would a price floor be nonbinding?

Accepted Answer

The answer of Figure 6-9 
-Refer to Figure 6-9.At which...

Question 18

Figure 6-9 
-Refer to Figure 6-9.At which price would a price ceiling be nonbinding?

Accepted Answer

A price ceiling is nonbinding when it is set below the equilibrium price. In this case, the equilibrium price is $5 and therefore the price ceiling would be nonbinding at any price above $5, which is answer choice D.

Question 19

Figure 6-9 
-Refer to Figure 6-9.A price ceiling set at

Accepted Answer

At a price ceiling of $4, the demand will be higher than the supply resulting in a shortage of 6 units.

Question 20

Figure 6-6 
-Refer to Figure 6-6.In which of the following cases would sellers have to develop a rationing mechanism?

Accepted Answer

The answer of Figure 6-6 
-Refer to Figure 6-6.In which...

Quiz 6: Supply,demand,and Government Policies

Figure 6-8 -Refer to Figure 6-8.If the government imposes a price ceiling of $2 on this market,then there will be

Figure 6-7 -Refer to Figure 6-7.Suppose a price floor of $7 is imposed on this market.As a result,

Figure 6-7 -Refer to Figure 6-7.Which of the following price controls would cause a surplus of 20 units of the good?

Figure 6-7 -Refer to Figure 6-7.For a price ceiling to be binding in this market,it would have to be set at

Figure 6-9 -Refer to Figure 6-9.A price floor set at

Figure 6-7 -Refer to Figure 6-7.For a price floor to be binding in this market,it would have to be set at

Figure 6-8 -Refer to Figure 6-8.The price of the good would continue to serve as the rationing mechanism if

Figure 6-9 -Refer to Figure 6-9.At which price would a price floor be binding?

Figure 6-7 -Refer to Figure 6-7.Which of the following price controls would cause a shortage of 20 units of the good?

Figure 6-10 -Refer to Figure 6-10.A price ceiling set at

Figure 6-8 -Refer to Figure 6-8.If the government imposes a price floor of $5 on this market,then there will be

Figure 6-6 -Refer to Figure 6-6.If the government imposes a price floor of $6 on this market,then there will be

Figure 6-7 -Refer to Figure 6-7.Suppose a price ceiling of $5 is imposed on this market.As a result,

Figure 6-9 -Refer to Figure 6-9.At which price would a price ceiling be binding?

Figure 6-6 -Refer to Figure 6-6.If the government imposes a price floor of $14 on this market,then there will be

Figure 6-9 -Refer to Figure 6-9.At which price would a price floor be nonbinding?

Figure 6-9 -Refer to Figure 6-9.At which price would a price ceiling be nonbinding?

Figure 6-9 -Refer to Figure 6-9.A price ceiling set at

Figure 6-6 -Refer to Figure 6-6.In which of the following cases would sellers have to develop a rationing mechanism?