EC120 Chapter 6: Chapter 6 - Supply, Demand, and Government Policies
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Question 1
The shortage in apartments causes by rent control is worse...
In the long-run, because the long-run supply is more elastic. | ||
In the long-run, because the long-run supply is less elastic. | ||
In the short-run, because the short-run supply is more elastic. | ||
In the short-run, because the short-run supply is less elastic. |
2 points
Question 2
Airline regulation of the 1970s produced a similar result to which of the following government interventions?
Communism | ||
Rent control laws | ||
The Affordable Care Act | ||
Minimum wage laws |
2 points
Question 3
What is a price floor?
A maximum price allowed by law. | ||
A minimum price allowed by law. | ||
A maximum price consumers are willing to pay. | ||
A minimum price consumers are willing to pay. |
2 points
Question 4
In 1938, Congress set the first minimum wage at $0.25 per hour. While this was a modest price floor for the country, it was a very large increase for what US territory which was not exempt from the law?
Arizona | ||
Puerto Rico | ||
Cuba | ||
Hawaii |
2 points
Question 5
Which of the following is a possible effect of a price ceiling?
A surplus of the good. | ||
Increases in product quality. | ||
Increased gains from trade. | ||
People will waste time in lines waiting to purchase the good. |
2 points
Question 6
Which of the following is a possible effect of a price floor?
Decreases in product quality. | ||
The quantity supplied exceeds the quantity demanded. | ||
Increased gains from trade. | ||
A shortage of the good. |
2 points
Question 7
Which of the following is a possible effect of a price ceiling?
Increased gains from trade. | ||
Increases in product quality. | ||
A surplus of the good. | ||
The quantity demanded exceeds the quantity supplied. |
Who bears the primary costs of a rent control program?
A. | landlords | |||||||||||||
B. | renters that get rent-controlled apartments | |||||||||||||
C. | taxpayers | |||||||||||||
D. | the wealthy Assume the demand for sushi is Qd = 180 - 3P, where Qd is quantity demanded and P = price in dollars. The supply of sushi is Qs = 80 + 5P, where Qs is quantity supplied (and P is, again, price in dollars). A price of $20 would result in:
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US agricultural price supports are politically popular because
A. | They have no adverse impacts | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
B. | The US would have food shortages without them | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
C. | The benefits accrue to a large number of voters and the costs are paid by a small number of voters | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
D. | The costs are spread out among millions of people Assume the demand for sushi is Qd = 180 - 3P, where Qd is quantity demanded and P = price in dollars. The supply of sushi is Qs = 80 + 5P, where Qs is quantity supplied (and P is, again, price in dollars). What would be the equilibrium price?
Price floors and ceiling prices:
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