Exam 3 ECO 201 Nietfeld
black markets - ANS-a market in which goods or services are bought and sold illegally,
either because it is illegal to sell them at all or because the prices charged are legally
prohibited by a price ceiling
minimum wage - ANS-a minimum price that an employer can pay a worker for an hour
of labor
price ceiling - ANS-a maximum price that can be legally charged for a good or service
price controls - ANS-government-imposed limits on the prices that producers may
charge in the market
price floor - ANS-A legal minimum on the price at which a good can be sold
price gouging laws - ANS-temporary ceilings on the price that sellers can charge for a
good during times of emergency
rent control - ANS-a price ceiling on rental housing
Does a binding price ceiling cause a shortage or a surplus? Provide an example to
support your answer. - ANS-
Does a nonbinding price floor cause a shortage or a surplus? support your answer -
ANS-
Will a surplus or a shortage caused by a price control become smaller or larger over
time? - ANS-
Are price gouging laws an example of a price floor or a price ceiling? - ANS-
what will happen to the market price when a price control is non-binding? - ANS-
Imagine that the community you live in decides to enact a rent control of $700 per
month on every one-bedroom apartment. Using the following table, determine the
market price and equilibrium quantity without rent control. How many one-bedroom
apartments will be rented after the rent control law is passed?
black markets - ANS-a market in which goods or services are bought and sold illegally,
either because it is illegal to sell them at all or because the prices charged are legally
prohibited by a price ceiling
minimum wage - ANS-a minimum price that an employer can pay a worker for an hour
of labor
price ceiling - ANS-a maximum price that can be legally charged for a good or service
price controls - ANS-government-imposed limits on the prices that producers may
charge in the market
price floor - ANS-A legal minimum on the price at which a good can be sold
price gouging laws - ANS-temporary ceilings on the price that sellers can charge for a
good during times of emergency
rent control - ANS-a price ceiling on rental housing
Does a binding price ceiling cause a shortage or a surplus? Provide an example to
support your answer. - ANS-
Does a nonbinding price floor cause a shortage or a surplus? support your answer -
ANS-
Will a surplus or a shortage caused by a price control become smaller or larger over
time? - ANS-
Are price gouging laws an example of a price floor or a price ceiling? - ANS-
what will happen to the market price when a price control is non-binding? - ANS-
Imagine that the community you live in decides to enact a rent control of $700 per
month on every one-bedroom apartment. Using the following table, determine the
market price and equilibrium quantity without rent control. How many one-bedroom
apartments will be rented after the rent control law is passed?
