University:
College of the Holy Cross
Course:
ECON 110 | Principles of Economics
Academic year:

2020
Views:

481

Pages:

7
Author:

levedzgetmo7f

Question 1 2 out of 2 points The minimum wage law is an example of a: Selected Answer: price floor. Question 2 2 out of 2 points Which of the following is an accurate statement about the consequence of a binding price floor? Selected Answer: Binding price floors encourage the formation of a black market. Question 3 2 out of 2 points You would expect there to be many customers for a black market good when the opportunity cost of finding the good under a: Selected Answer: binding price ceiling is high. Question 4 2 out of 2 points Suppose you live in a community with no price controls. What do you expect to happen if your town borders a community where there is a binding price floor on most products? Selected Answer: More consumers would purchase the product in the community without a price floor. Question 5 0 out of 2 points What is the incentive to create a black market when a binding price ceiling exists? Selected Answer: A black market emerges because buyers who have a low opportunity cost are seeking out the product. Question 6 2 out of 2 points If a price ceiling is imposed at $15 per unit when the equilibrium market price is $12, there will be: Selected Answer: no surplus or shortage. Question 7 2 out of 2 points What would you expect the consequences to size and quality would be for a product sold under a binding price ceiling? Selected Answer: Both the quality and the size of the product will decrease. Question 8 2 out of 2 points How would an economist explain a teenager’s continued unemployment where there exists a minimum wage? Selected Answer: The minimum wage law made it such that the quantity of labor willing to work at that wage was greater than the quantity of labor demanded at that wage. Question 9 2 out of 2 points Refer to the accompanying figure to answer the questions that follow. The market is currently at market equilibrium. If a binding price ceiling of P1 is imposed, by how much would the quantity supplied change? Selected Answer: It would decrease by 18,000 units. Question 10 2 out of 2 points Setting a price ceiling below the equilibrium price can result in: Selected Answer: a shortage, where the quantity demanded exceeds the quantity supplied. Question 11 2 out of 2 points Use the following table to answer the questions that follow. At what price level does the labor market experience its largest surplus? Selected Answer: $8.00 Question 12 0 out of 2 points If a store sells a good at the market price, even though the government authorities have set the maximum price that can be charged for it, the store is selling the good in a(n): Selected Answer: legal market for a market price that is lower. Question 13 2 out of 2 points Why do shortages develop under a binding price ceiling? Selected Answer: It makes the price so low that the quantity demanded exceeds the quantity supplied in the legal market. Question 14 2 out of 2 points Use the following figure to answer the questions that follow. If the government imposes a price floor on wheat at $5, predict the amount of disequilibrium. Selected Answer: There will be a surplus of 3,000,000. Question 15 2 out of 2 points Refer to the accompanying figure to answer the questions that follow. If there is a $180 price ceiling imposed on a textbook, what will be the disequilibrium amount? Selected Answer: There will not be a shortage.