ECON 102 QUESTIONS AND ANSWERS LATEST UPDATED
VERSION, GRADED A+.
rice system
signal to everyone in the system what goods are relatively more or less scarce
initial demand and supply intersection
p1 and E
Suppose that consumer income decreases and that hamburger is an inferior good. Which of the
following will occur in the market for hamburger?
Market clearing price will rise, and equilibrium quantity will rise.
Which of the following are ways to ration goods and services?
price
physical force
political power
In general, which rationing system leads to the most efficient use of available resources?
free market
A maximum legal price that may be charged for a particular good or service is known as a
price ceiling
Government policies such as price controls, rent controls, and quantity restrictions have the effect of
creating excess quantities demanded or excess quantities supplied.
The objective of rent controls is to
keep rents below levels that would be observed in a freely competitive market.
Which of the following will likely occur when price floors in agriculture are implemented?
Quantity supplied will exceed quantity demanded
All of the following result from price floors in agriculture EXCEPT
lower prices to consumers for agricultural products that have price floors
A reduction in the minimum wage is expected to cause which of the following?
an increase in the number of workers employed
A supply restriction that restricts the amount of a good that can be imported is a(n)
Import quota
, A supply restriction on imported goods, such as the government's restriction of imported oil for many
years, is referred to as
An import quota
If Niki is willing to pay up to $5 for an ice-cream bar but she actually pays $2 for it. The consumer
surplus of the ice-cream bar for Niki
$3
If the market clearing price increases, then the amount of producer surplus will
increases
If the government imposes a price floor that is higher than the market clearing price, then
both consumer surplus and producer surplus will decrease.
Assume that the market clearing price for a shirt is $20, but that the maximum price that can be
charged is $15. This is an example of
a price ceiling that will likely lead to a shortage of shirts on the market.
Agriculture price supports that establish a price floor at which agricultural products may be 3)
purchased that exceeds the market clearing price
result in the quantity of these products supplied exceeding the quantity demanded at the floor price.
Refer to the above figure. If government sets the maximum legal price of gasoline at $2 per 4) gallon,
then the $2 limit acts as
a price ceiling
Refer to the above figure. If the government set a price floor of $3.50 per gallon, there would be
an excess quantity supplied equal to 100,000 gallons
An effective price ceiling usually generates
the use of nonprice rationing devices
Suppose the government imposes a minimum wage rate of $20.00 per 10) hour. This will likely result
in
surplus of labor
A price floor represents
a minimum price that can be legally charged for a good or service
Of the following groups, which benefits most from a government price support program that 12)
establishes a floor price for an agricultural product that is higher than the product's market
clearing price?
VERSION, GRADED A+.
rice system
signal to everyone in the system what goods are relatively more or less scarce
initial demand and supply intersection
p1 and E
Suppose that consumer income decreases and that hamburger is an inferior good. Which of the
following will occur in the market for hamburger?
Market clearing price will rise, and equilibrium quantity will rise.
Which of the following are ways to ration goods and services?
price
physical force
political power
In general, which rationing system leads to the most efficient use of available resources?
free market
A maximum legal price that may be charged for a particular good or service is known as a
price ceiling
Government policies such as price controls, rent controls, and quantity restrictions have the effect of
creating excess quantities demanded or excess quantities supplied.
The objective of rent controls is to
keep rents below levels that would be observed in a freely competitive market.
Which of the following will likely occur when price floors in agriculture are implemented?
Quantity supplied will exceed quantity demanded
All of the following result from price floors in agriculture EXCEPT
lower prices to consumers for agricultural products that have price floors
A reduction in the minimum wage is expected to cause which of the following?
an increase in the number of workers employed
A supply restriction that restricts the amount of a good that can be imported is a(n)
Import quota
, A supply restriction on imported goods, such as the government's restriction of imported oil for many
years, is referred to as
An import quota
If Niki is willing to pay up to $5 for an ice-cream bar but she actually pays $2 for it. The consumer
surplus of the ice-cream bar for Niki
$3
If the market clearing price increases, then the amount of producer surplus will
increases
If the government imposes a price floor that is higher than the market clearing price, then
both consumer surplus and producer surplus will decrease.
Assume that the market clearing price for a shirt is $20, but that the maximum price that can be
charged is $15. This is an example of
a price ceiling that will likely lead to a shortage of shirts on the market.
Agriculture price supports that establish a price floor at which agricultural products may be 3)
purchased that exceeds the market clearing price
result in the quantity of these products supplied exceeding the quantity demanded at the floor price.
Refer to the above figure. If government sets the maximum legal price of gasoline at $2 per 4) gallon,
then the $2 limit acts as
a price ceiling
Refer to the above figure. If the government set a price floor of $3.50 per gallon, there would be
an excess quantity supplied equal to 100,000 gallons
An effective price ceiling usually generates
the use of nonprice rationing devices
Suppose the government imposes a minimum wage rate of $20.00 per 10) hour. This will likely result
in
surplus of labor
A price floor represents
a minimum price that can be legally charged for a good or service
Of the following groups, which benefits most from a government price support program that 12)
establishes a floor price for an agricultural product that is higher than the product's market
clearing price?
