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12. [3 Marks What happens due to the introduction of a binding price ceiling? A. PS decreases. CS increases. TS decreases. B. PS decreases. CS increases. TS may increase or decrease. C. PS increases. CS decreases. TS decreases. D. PS increases. CS decreases. TS may increase or decrease. E. None of the above.

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Related questions

1. What is the effect of an increase in consumer income on the market for shirts?

a) Equilibrium price increases, equilibrium quantity increases

b) Equilibrium price increases, equilibrium quantity decreases

c) Equilibrium price decreases, equilibrium quantity increases

d) Equilibrium price decreases, equilibrium quantity decreases

2. What is the effect of an improvement in the technology of producers in the market for shirts?

a) Equilibrium price increases, equilibrium quantity increases

b) Equilibrium price increases, equilibrium quantity decreases

c) Equilibrium price decreases, equilibrium quantity increases

d) Equilibrium price decreases, equilibrium quantity decreases

3. What is the effect of an increase in the price of chicken sandwiches on the market for hamburgers?

a) Equilibrium price increases, equilibrium quantity increases

b) Equilibrium price increases, equilibrium quantity decreases

c) Equilibrium price decreases, equilibrium quantity increases

d) Equilibrium price decreases, equilibrium quantity decreases

4. What is the effect of an increase in labor costs on the market for slices of pizza?

a) Equilibrium price increases, equilibrium quantity increases

b) Equilibrium price increases, equilibrium quantity decreases

c) Equilibrium price decreases, equilibrium quantity increases

d) Equilibrium price decreases, equilibrium quantity decreases

5. What is the effect of a change in the weather in Europe on the market for DVDs in the U.S.?

a) Equilibrium price increases, equilibrium quantity increases
b) Equilibrium price increases, equilibrium quantity decreases
c) Equilibrium price decreases, equilibrium quantity increases
d) Equilibrium price unchanged, equilibrium quantity unchanged

6. What is the effect of an increase in preferences for MP3 players on the market for CDs?

a) Equilibrium price increases, equilibrium quantity increases b) Equilibrium price increases, equilibrium quantity decreases c) Equilibrium price decreases, equilibrium quantity increases d) Equilibrium price decreases, equilibrium quantity decreases

7. What is the effect of a decrease in income of consumers on the market for cars?

a) Equilibrium price increases, equilibrium quantity increases

b) Equilibrium price increases, equilibrium quantity decreases

c) Equilibrium price decreases, equilibrium quantity increases

d) Equilibrium price decreases, equilibrium quantity decreases

8. What is the effect of an increase in preferences for computers on the market for computers?

a) Equilibrium price increases, equilibrium quantity increases

b) Equilibrium price increases, equilibrium quantity decreases

c) Equilibrium price decreases, equilibrium quantity increases

d) Equilibrium price decreases, equilibrium quantity decreases

9. What is the effect of a decrease in preference for ice cream on the market for ice cream?

a) Equilibrium price increases, equilibrium quantity increases

b) Equilibrium price increases, equilibrium quantity decreases

c) Equilibrium price decreases, equilibrium quantity increases

d) Equilibrium price decreases, equilibrium quantity decreases

10. What is the effect of a decrease in the price of chicken sandwiches on the market for slices of pizza?

a) Equilibrium price increases, equilibrium quantity increases

b) Equilibrium price increases, equilibrium quantity decreases

c) Equilibrium price decreases, equilibrium quantity increases

d) Equilibrium price decreases, equilibrium quantity decreases

Questions 11 to 14 -- Two changes

11. What is the effect of an increase in consumer income and an improvement in technology (see questions 1 and 2)?

a) Equilibrium price increases, change in equilibrium quantity uncertain

b) Equilibrium price decreases, change in equilibrium quantity uncertain

c) Change in equilibrium price uncertain, equilibrium quantity increases

d) Change in equilibrium price uncertain, equilibrium quantity decreases

12 What is the effect of a decrease in the price of substitute good and an increase in the price of labor (see questions 4 and 10)?

a) Equilibrium price increases, change in equilibrium quantity uncertain

b) Equilibrium price decreases, change in equilibrium quantity uncertain

c) Change in equilibrium price uncertain, equilibrium quantity increases

d) Change in equilibrium price uncertain, equilibrium quantity decreases

13 What is the effect of a decrease in consumer income and a decrease in the price of a substitute good (see questions 7 and 10)?

a) Equilibrium price increases, change in equilibrium quantity uncertain

b) Equilibrium price decreases, change in equilibrium quantity uncertain

c) Change in equilibrium price uncertain, equilibrium quantity increases

d) Equilibrium price decreases, equilibrium quantity decreases

14. What is the effect of an increase in preferences for a good and an improvement in technology (see questions 2 and 8)?

a) Equilibrium price increases, change in equilibrium quantity uncertain

b) Equilibrium price decreases, change in equilibrium quantity uncertain

c) Change in equilibrium price uncertain, equilibrium quantity increases

d) Change in equilibrium price uncertain, equilibrium quantity decreases

Questions 15-20 - Inelastic and Elastic Curves

15. With perfectly inelastic demand, what is the effect of an increase in preferences for a good by consumers?

a) Equilibrium price increases, equilibrium quantity increases

b) Equilibrium price increases, equilibrium quantity unchanged

c) Equilibrium price decreases, equilibrium quantity increases

d) Equilibrium price unchanged, equilibrium quantity decreases

16. With perfectly inelastic demand, what is the effect of an improvement in technology?

a) Equilibrium price unchanged, equilibrium quantity increases

b) Equilibrium price increases, equilibrium quantity decreases

c) Equilibrium price decreases, equilibrium quantity unchanged

d) Equilibrium price decreases, equilibrium quantity decreases

17. With perfectly elastic demand, what is the effect of an increase in labor costs?

a) Equilibrium price unchanged, equilibrium quantity increases

b) Equilibrium price unchanged, equilibrium quantity decreases

c) Equilibrium price increases, equilibrium quantity unchanged

d) Equilibrium price decreases, equilibrium quantity unchanged

18. With perfectly inelastic supply, what is the effect of an increase in consumer income?

a) Equilibrium price unchanged, equilibrium quantity increases

b) Equilibrium price unchanged, equilibrium quantity decreases

c) Equilibrium price increases, equilibrium quantity unchanged

d) Equilibrium price decreases, equilibrium quantity unchanged

19. With perfectly elastic supply, what is the effect of an increase in consumer income?

a) Equilibrium price unchanged, equilibrium quantity increases

b) Equilibrium price unchanged, equilibrium quantity decreases

c) Equilibrium price increases, equilibrium quantity unchanged

d) Equilibrium price decreases, equilibrium quantity unchanged

20. If the demand curve can be represented with the equation QD = 40 รขย€ย“ P and the supply curve can be represented with the equation QS = 5 + 6 P, what is the equilibrium quantity in this market?

a) 5 b) 15 c) 25 d) 35

1. Assume every buyer purchases only one unit of a product, which forms the market demand P = 650 - 20. The monopoly firm has constant marginal cost at 50 and zero fixed cost. You may find it useful to draw your diagram in part (d) as you work through this question. 1. (a) Show your step-by-step calculations of the profit-maximizing output Qs and price Ps, profits Ts, consumer surplus CSs, producer surplus PSs, and deadweight loss DWL, if this monopoly firm is the least powerful type of monopoly. (18 marks) ls 150 Ps 350 TS 45,000 CS 22,500 PS 45,000 DW Lแป™ 22,500 1. (b) Show your step-by-step calculations of the profit-maximizing output Qp, profits tip, consumer surplus Sp, producer surplus PSp, and deadweight loss DWLp if this monopoly firm is the most powerful type of monopoly. (15 marks) Op 300 Tp 90,000 0 PSp 90,000 DWL, 0 1. (c) Use your results to explain the trade-off between efficiency and equity when there is only one firm serving all the consumers in the market and it is not regulated by the government to protect the interests of the consumers. (7 marks) 1. (d) Plot all your results in a properly labeled diagram. (5 marks) 650 P = 350 MR D = MRP MC = AC Qs = 150 Qp = 300 = Qc Q

As disposable income increases, consumption:

A) decreases.

B) increases.

C) may either increase or decrease depending on the wealth effect.

D) may either increase or decrease depending on the mpc.

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