FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 5: Price Controls and Quotas

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

Multiple Choice

Review LaterAdd Note

Review Later

Use the following to answer questions : $\begin{array}{l}\text { Table: The Market for Banana Muffins }\\\begin{array} { c c c } \hline & { \text { Market for Banana Muffins } } \\ \text { Price } & \begin{array} { c } \text { Quantity Demanded } \\\text { (unit) }\end{array} & \begin{array} { c } \text { Quantity Supplied } \\\text { (units) }\end{array} \\\hline \$ 1.10 & 9000 & 3000 \\1.20 & 8000 & 5000 \\1.30 & 7000 & 7000 \\1.40 & 6000 & 9000 \\1.50 & 5000 & 1100\end{array}\end{array}$ -(Table: Market for Banana Muffins) Use Table: Market for Banana Muffins.If the government imposes a quota of 5 000 on the banana muffin market,the quota rent per banana muffin will be:

A) $1.20.
B) $0.30.
C) $1.50.
D) $1.00.

Correct Answer

verified

Show Answer

Question 42

Multiple Choice

Review LaterAdd Note

Review Later

Which statement about the undesirable side effects of a quantity control is NOT correct?

A) Quantity controls do not lead to deadweight loss.
B) Some mutually beneficial transactions do not occur because of quantity controls.
C) Quantity controls provide incentives for illegal activities.
D) Quantity controls cause a wedge between the demand price and supply price.

Correct Answer

verified

Show Answer

Question 43

Multiple Choice

Review LaterAdd Note

Use the following to answer questions : -(Figure: Rent Controls) Use Figure: Rent Controls.If rent controls are set at Rent₁:

A persistent shortage may occur if:

The quota rent is the same thing as deadweight loss.

Use the following to answer questions : -(Figure: Supply and Demand in Agriculture) Use Figure: Supply and Demand in Agriculture.If a price floor at P₄ is set to help improve farm incomes and the government wants to assure farmers that their output will be purchased,the government must purchase an amount of output equal to:

A quota rent for tuna is the difference between the demand price and the supply price if a quota limit is imposed in the tuna market.

The government decides to impose a price ceiling on a good because it thinks that the market-determined price is too high.If the government imposes the price ceiling below the equilibrium price:

A price ceiling below the equilibrium price is likely to result in a persistent _____,a transfer of surplus from _____,and _____ deadweight loss.

A binding rent-control price ceiling does NOT result in:

Suppose that the Canadian government imposes a binding quota on the number of Japanese-made cars allowed into Canada.Assuming that Japanese-made cars and Canadian-made cars are substitutes in consumption,we would expect the price of Japanese cars to _____ and the price of Canadian-made cars to _____.

Use the following to answer questions : $\begin{array}{l}\text { Table: The Market for Pop }\\\begin{array} { l c c } \hline & { \text { Market for a Can of Pop } } \\ \begin{array} { l } \text { Price } \\\text { (\$/unit) }\end{array} & \begin{array} { c } \text { Quantity Demanded } \\\text { (cans) }\end{array} & \begin{array} { c } \text { Quantity Supplied } \\\text { (cans) }\end{array} \\\hline 0.50 & 10 & 7 \\0.75 & 8 & 8 \\1.00 & 6 & 9 \\1.25 & 4 & 10 \\1.50 & 2 & 11\end{array}\end{array}$ -(Table: The Market for Pop) Use Table: The Market for Pop.If the government does NOT impose a price control,the price of a can of pop will equal:

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

A price ceiling will have NO immediate effect if:

If the government imposes binding rent control:

Use the following to answer questions : Table: The Market for Taxi Rides $\begin{array} { c c c } \hline \begin{array} { l } \text { Fare } \\\text { (per ride) }\end{array} & \begin{array} { c } \text { Quantity Demanded } \\\text { (millions of rides } \\\text { per year) }\end{array} & \begin{array} { c } \text { Quantity Supplied } \\\text { (millions of rides } \\\text { per year) }\end{array} \\\hline \$ 7.00 & 6 & 14 \\6.50 & 7 & 13 \\6.00 & 8 & 12 \\5.50 & 9 & 11 \\5.00 & 10 & 10 \\4.50 & 11 & 9 \\4.00 & 12 & 8 \\3.50 & 13 & 7 \\3.00 & 14 & 6 \\\hline\end{array}$ -(Table: The Market for Taxi Rides) Use Table: The Market for Taxi Rides.If a government quota limit at 7 million rides is imposed on this market,the quota rent that will accrue to the owner of a taxi licence will be _____ per ride,but there will be a total missed opportunity (inefficiency) to consumers and producers of _____ million rides.

Use the following to answer question 36: -(Figure: Price Control) Use Figure: Price Control.One effective price ceiling would be the price indicated at point _____,and there would be a _____ equal to the difference between points _____.

A binding price ceiling is usually designed to:

To be binding,a price ceiling must be set at a price _____ the equilibrium price.

The system of a special numbered plate that must be affixed to the taxicab in Toronto is an example of a: