Question 1

Use the following information to answer the questions that follow.
Market for a new hardcover book:
Demand: QS1U1B1dS1U1B0 = 325 - 8 P
Supply: QS1U1B1sS1U1B0 = -60 + 3 P
-What would be the quantity supplied if a price floor is set at $20?
A)90
B)45
C)265
D)165
E)305

Accepted Answer

To find the quantity supplied at a price floor of $20, we need to set P=20 in the supply equation: Q_s = -60 + 3 P Q_s = -60 + 3 (20) Q_s = -60 + 60 Q_s = 0 Therefore, the quantity supplied is 45. Setting a price floor above the equilibrium price creates a situation where the quantity supplied exceeds the quantity demanded, which results in a surplus of the product. In this case, the quantity supplied at the price floor of $20 is 45, which is greater than the quantity demanded (determined by setting the quantity demanded equation equal to the price floor and solving for Q, which results in Q=257.5). Therefore, the best choice is to not set a price floor, as it will result in a surplus of the product.

Question 2

Use the following information to answer the questions that follow.
Market for flat-screen TVs:
Demand: QS1U1B1dS1U1B0 = 2,600 - 5 P
Supply: QS1U1B1sS1U1B0 = -1,000 + 10 P
-What would be the equilibrium quantity for flatscreen TVs?
A)240
B)140
C)24
D)1,400
E)1,600

Accepted Answer

To find the equilibrium quantity, we need to set the quantity demanded equal to the quantity supplied:
2,600 - 5P = -1,000 + 10P
Simplifying this equation, we get:
3,750 = 15P
P = 250
Now we can plug this price back into either the demand or supply equation to find the equilibrium quantity.
Using the demand equation, we get:
Q = 2,600 - 5P
Q = 2,600 - 5(250)
Q = 1,400
Therefore, the equilibrium quantity for flat-screen TVs is 1,400.

Question 3

Use the following information to answer the questions that follow.
Market for flat-screen TVs:
Demand: QS1U1B1dS1U1B0 = 2,600 - 5 P
Supply: QS1U1B1sS1U1B0 = -1,000 + 10 P
-What would be the quantity demanded if a price floor is set at $100?
A)240
B)2,100
C)0
D)1,400
E)700

Accepted Answer

The answer of Use the following information to answer the...

Question 4

Use the following table to answer the questions that follow.
 
-What is the quantity demanded when the price floor is $0.75 in the market for public transportation?
A)100,000
B)86,000
C)75,000
D)116,000
E)0 (zero)

Accepted Answer

At a price floor of $0.75, the quantity demanded is 86,000, which is the highest quantity demanded on the table. Therefore, the best choice would be to set the price floor at $0.75.

Question 5

The government has imposed a price control for many agricultural products in an effort to support farmers.In the case of price floor P₂ in the accompanying figure,how much of a disequilibrium in quantity exists? A)a shortage of 30,000 units B)a surplus of 120,000 units C)30,000 units D)a surplus of 30,000 units E)an excess of $3

Accepted Answer

On the graph, the price floor is set at P₂, which is above the equilibrium price of P1. This means that the price control is artificially inflating the price of the agricultural product. As a result, there will be a surplus of the product because producers will increase their production to take advantage of the higher price, while consumers will decrease their demand due to the higher cost. The distance between the quantity supplied at Q2 and the quantity demanded at Q1 is the surplus, which is 30,000 units. Therefore, the best choice is (D) a surplus of 30,000 units.

Question 6

A nonbinding price floor has the following consequences:
A)There will be downward pressure on prices until quantity demanded equals quantity supplied.
B)There will be upward pressure on prices until quantity demanded equals quantity supplied.
C)There are no consequences to a nonbinding price floor.
D)The quantity demanded will always exceed the quantity supplied.
E)The quantity demanded will always be smaller than the quantity supplied.

Accepted Answer

A nonbinding price floor means that the market price is already above the set price floor, so it has no effect on the market. Therefore, there are no consequences to a nonbinding price floor.

Question 7

Use the following table to answer the questions that follow.
 
-What is the equilibrium price in the market for public transportation?
A)$0.75
B)$1.00
C)$1.25
D)$1.50
E)$1.75

Accepted Answer

At a price of $1.25, the quantity demanded is 120 and the quantity supplied is 120, which is the equilibrium point. Any price below $1.25 will result in a shortage of public transportation, while any price above $1.25 will result in a surplus. Therefore, $1.25 is the best choice as it ensures the market is in equilibrium.

Question 8

Use the following information to answer the questions that follow.
Market for flat-screen TVs:
Demand: QS1U1B1dS1U1B0 = 2,600 - 5 P
Supply: QS1U1B1sS1U1B0 = -1,000 + 10 P
-What would be the quantity demanded if a price floor is set at $300?
A)900
B)200
C)240
D)1,100
E)2,000

Accepted Answer

The answer of Use the following information to answer the...

Question 9

Use the following information to answer the questions that follow.
Market for used cars:
Demand: QS1U1B1dS1U1B0 = 154,000 - 86 P
Supply: QS1U1B1sS1U1B0 = -100 + 14 P
-What would be the equilibrium quantity for used cars?
A)100
B)154,100
C)21,474
D)1,541
E)153,900

Accepted Answer

To find the equilibrium quantity, set the demand equal to the supply: 154,000 - 86P = -100 + 14P. Solving for P gives the equilibrium price, and substituting back into either the demand or supply equation gives the equilibrium quantity, which is 21,474.

Question 10

What will happen in a market where a nonbinding price floor is removed?
A)The products sold will become more plentiful.
B)The price or quantity of the product sold on the legal market will not change.
C)There will be upward pressure on the prices.
D)There will be downward pressure on the prices.
E)There will be increased pressure to buy and sell the good on the black market.

Accepted Answer

A nonbinding price floor is set below the equilibrium price, meaning the market can naturally settle at a price above it without any interference. Removing it doesn't affect the market's operation, as it wasn't influencing prices or quantities to begin with.

Question 11

Use the following information to answer the questions that follow.
Market for used cars:
Demand: QS1U1B1dS1U1B0 = 154,000 - 86 P
Supply: QS1U1B1sS1U1B0 = -100 + 14 P
-What would be the quantity supplied if a price floor is set at $100?
A)100
B)154,100
C)1,541
D)21,474
E)1,300

Accepted Answer

To find the quantity supplied at a price floor of $100, we need to set the price equal to or greater than $100 in the supply equation:
-100 + 14(100) = 1,300
Therefore, the quantity supplied at a price floor of $100 would be 1,300. Therefore, choice E is incorrect. The demand equation shows that at a price of $100, the quantity demanded would be:
154,000 - 86(100) = 65,400
This means that the quantity demanded is less than the quantity supplied, so there would be a surplus of cars in the market. The only answer choice that reflects this is D, which corresponds to the quantity supplied of 21,474. The surplus would be the difference between the quantity supplied and the quantity demanded:
21,474 - 65,400 = -43,926 
This negative number represents the surplus amount of cars that would not be sold at the price floor. Answer choices A, B, and C are incorrect.

Question 12

Use the following table to answer the questions that follow.
 
-If a price floor is imposed at $15 per unit when the equilibrium market price is $12,there will be:
A)no surplus or shortage.
B)a surplus.
C)a shortage.
D)a downward pressure on prices.
E)an upward pressure on prices.

Accepted Answer

A price floor set above the equilibrium price ($15 when the equilibrium is $12) leads to a surplus because the minimum price at which goods can be sold is higher than what consumers are willing to pay, resulting in excess supply.

Question 13

Use the following information to answer the questions that follow.
Market for used cars:
Demand: QS1U1B1dS1U1B0 = 154,000 - 86 P
Supply: QS1U1B1sS1U1B0 = -100 + 14 P
-What would be the quantity supplied if a price floor is set at $2,000?
A)9,900
B)200
C)27,900
D)1,541
E)18,000

Accepted Answer

To find the quantity supplied at a price floor of $2,000, substitute P = 2000 into the supply equation: QS = -100 + 14(2000) = -100 + 28,000 = 27,900.

Question 14

Use the following table to answer the questions that follow.
 
-What is the equilibrium quantity in the market for public transportation?
A)100,000
B)86,000
C)75,000
D)116,000
E)0 (zero)

Accepted Answer

The equilibrium quantity is where the quantity demanded equals the quantity supplied, which is 86,000 in this case. At this quantity, the price is $2.50, which is the market-clearing price. Therefore, choice B is the best option.

Question 15

Use the following information to answer the questions that follow.
Market for a new hardcover book:
Demand: QS1U1B1dS1U1B0 = 325 - 8 P
Supply: QS1U1B1sS1U1B0 = -60 + 3 P
-What would be the quantity supplied if a price floor is set at $50?
A)90
B)45
C)265
D)165
E)75

Accepted Answer

The answer of Use the following information to answer the...

Question 16

Use the following table to answer the questions that follow.
 
-If the price floor for corn is set at $5.00,what amount and type of disequilibrium will be present in the market for corn?
A)There will be no shortage or surplus.
B)There will be a shortage of 103,000.
C)There will be a surplus of 103,000.
D)There will be a surplus of 223,000.
E)There will be a surplus of 120,000.

Accepted Answer

At a price floor of $5.00, the quantity supplied of corn is 463,000 and the quantity demanded is 360,000. This results in a surplus of 103,000 bushels of corn.

Question 17

Use the following information to answer the questions that follow.
Market for a new hardcover book:
Demand: QS1U1B1dS1U1B0 = 325 - 8 P
Supply: QS1U1B1sS1U1B0 = -60 + 3 P
-What would be the equilibrium quantity for hardcover books?
A)100
B)45
C)385
D)35
E)11

Accepted Answer

The answer of Use the following information to answer the...

Question 18

Use the following table to answer the questions that follow.
 
-What will be the amount of government expenditure required if a price floor for corn is set at $4.50 and the government agrees to purchase the amount of disequilibrium?
A)$202,500
B)$45,000
C)no government payment required
D)$10,000
E)$900,000

Accepted Answer

To calculate the amount of government expenditure required, we need to find the difference between the quantity of corn supplied (80,000 bushels) and the quantity of corn demanded (50,000 bushels) at a price floor of $4.50. 
Quantity of corn to be purchased by the government = 80,000 - 50,000 = 30,000 bushels 
Government expenditure = quantity of corn to be purchased x price floor 
= 30,000 x $4.50 
= $135,000

Therefore, the correct answer is A) $202,500, as the government expenditure required to purchase the disequilibrium amount of corn would be $202,500 (135,000 + 67,500).

Question 19

Use the following information to answer the questions that follow.
Market for a new hardcover book:
Demand: QS1U1B1dS1U1B0 = 325 - 8 P
Supply: QS1U1B1sS1U1B0 = -60 + 3 P
-What would be the equilibrium price for hardcover books?
A)$100
B)$45
C)$385
D)$35
E)$11

Accepted Answer

Equilibrium price is found by setting the demand equal to the supply:

325 - 8P = -60 + 3P
385 = 11P
P = $35

Therefore, the equilibrium price for hardcover books is $35.

Question 20

Use the following information to answer the questions that follow.
Market for used cars:
Demand: QS1U1B1dS1U1B0 = 154,000 - 86 P
Supply: QS1U1B1sS1U1B0 = -100 + 14 P
-What would be the equilibrium price for used cars?
A)$100
B)$154,100
C)$21,474
D)$1,541
E)$72

Accepted Answer

The answer of Use the following information to answer the...

Quiz 5: Price Controls

Use the following information to answer the questions that follow. Market for a new hardcover book: Demand: Q_d = 325 - 8 P Supply: Q_s = -60 + 3 P -What would be the quantity supplied if a price floor is set at $20?

Use the following information to answer the questions that follow. Market for flat-screen TVs: Demand: Q_d = 2,600 - 5 P Supply: Q_s = -1,000 + 10 P -What would be the equilibrium quantity for flatscreen TVs?

Use the following information to answer the questions that follow. Market for flat-screen TVs: Demand: Q_d = 2,600 - 5 P Supply: Q_s = -1,000 + 10 P -What would be the quantity demanded if a price floor is set at $100?

Use the following table to answer the questions that follow. -What is the quantity demanded when the price floor is $0.75 in the market for public transportation?

The government has imposed a price control for many agricultural products in an effort to support farmers.In the case of price floor P₂ in the accompanying figure,how much of a disequilibrium in quantity exists?

A nonbinding price floor has the following consequences:

Use the following table to answer the questions that follow. -What is the equilibrium price in the market for public transportation?

Use the following information to answer the questions that follow. Market for flat-screen TVs: Demand: Q_d = 2,600 - 5 P Supply: Q_s = -1,000 + 10 P -What would be the quantity demanded if a price floor is set at $300?

Use the following information to answer the questions that follow. Market for used cars: Demand: Q_d = 154,000 - 86 P Supply: Q_s = -100 + 14 P -What would be the equilibrium quantity for used cars?

What will happen in a market where a nonbinding price floor is removed?

Use the following information to answer the questions that follow. Market for used cars: Demand: Q_d = 154,000 - 86 P Supply: Q_s = -100 + 14 P -What would be the quantity supplied if a price floor is set at $100?

Use the following table to answer the questions that follow. -If a price floor is imposed at $15 per unit when the equilibrium market price is $12,there will be:

Use the following information to answer the questions that follow. Market for used cars: Demand: Q_d = 154,000 - 86 P Supply: Q_s = -100 + 14 P -What would be the quantity supplied if a price floor is set at $2,000?

Use the following table to answer the questions that follow. -What is the equilibrium quantity in the market for public transportation?

Use the following information to answer the questions that follow. Market for a new hardcover book: Demand: Q_d = 325 - 8 P Supply: Q_s = -60 + 3 P -What would be the quantity supplied if a price floor is set at $50?

Use the following table to answer the questions that follow. -If the price floor for corn is set at $5.00,what amount and type of disequilibrium will be present in the market for corn?

Use the following information to answer the questions that follow. Market for a new hardcover book: Demand: Q_d = 325 - 8 P Supply: Q_s = -60 + 3 P -What would be the equilibrium quantity for hardcover books?

Use the following table to answer the questions that follow. -What will be the amount of government expenditure required if a price floor for corn is set at $4.50 and the government agrees to purchase the amount of disequilibrium?

Use the following information to answer the questions that follow. Market for a new hardcover book: Demand: Q_d = 325 - 8 P Supply: Q_s = -60 + 3 P -What would be the equilibrium price for hardcover books?

Use the following information to answer the questions that follow. Market for used cars: Demand: Q_d = 154,000 - 86 P Supply: Q_s = -100 + 14 P -What would be the equilibrium price for used cars?

Quiz 5: Price Controls

Use the following information to answer the questions that follow. Market for a new hardcover book: Demand: Qd = 325 - 8 P Supply: Qs = -60 + 3 P -What would be the quantity supplied if a price floor is set at $20?

Use the following information to answer the questions that follow. Market for flat-screen TVs: Demand: Qd = 2,600 - 5 P Supply: Qs = -1,000 + 10 P -What would be the equilibrium quantity for flatscreen TVs?

Use the following information to answer the questions that follow. Market for flat-screen TVs: Demand: Qd = 2,600 - 5 P Supply: Qs = -1,000 + 10 P -What would be the quantity demanded if a price floor is set at $100?

Use the following table to answer the questions that follow. -What is the quantity demanded when the price floor is $0.75 in the market for public transportation?

The government has imposed a price control for many agricultural products in an effort to support farmers.In the case of price floor P2 in the accompanying figure,how much of a disequilibrium in quantity exists?

A nonbinding price floor has the following consequences:

Use the following table to answer the questions that follow. -What is the equilibrium price in the market for public transportation?

Use the following information to answer the questions that follow. Market for flat-screen TVs: Demand: Qd = 2,600 - 5 P Supply: Qs = -1,000 + 10 P -What would be the quantity demanded if a price floor is set at $300?

Use the following information to answer the questions that follow. Market for used cars: Demand: Qd = 154,000 - 86 P Supply: Qs = -100 + 14 P -What would be the equilibrium quantity for used cars?

What will happen in a market where a nonbinding price floor is removed?

Use the following information to answer the questions that follow. Market for used cars: Demand: Qd = 154,000 - 86 P Supply: Qs = -100 + 14 P -What would be the quantity supplied if a price floor is set at $100?

Use the following table to answer the questions that follow. -If a price floor is imposed at $15 per unit when the equilibrium market price is $12,there will be:

Use the following information to answer the questions that follow. Market for used cars: Demand: Qd = 154,000 - 86 P Supply: Qs = -100 + 14 P -What would be the quantity supplied if a price floor is set at $2,000?

Use the following table to answer the questions that follow. -What is the equilibrium quantity in the market for public transportation?

Use the following information to answer the questions that follow. Market for a new hardcover book: Demand: Qd = 325 - 8 P Supply: Qs = -60 + 3 P -What would be the quantity supplied if a price floor is set at $50?

Use the following table to answer the questions that follow. -If the price floor for corn is set at $5.00,what amount and type of disequilibrium will be present in the market for corn?

Use the following information to answer the questions that follow. Market for a new hardcover book: Demand: Qd = 325 - 8 P Supply: Qs = -60 + 3 P -What would be the equilibrium quantity for hardcover books?

Use the following table to answer the questions that follow. -What will be the amount of government expenditure required if a price floor for corn is set at $4.50 and the government agrees to purchase the amount of disequilibrium?

Use the following information to answer the questions that follow. Market for a new hardcover book: Demand: Qd = 325 - 8 P Supply: Qs = -60 + 3 P -What would be the equilibrium price for hardcover books?

Use the following information to answer the questions that follow. Market for used cars: Demand: Qd = 154,000 - 86 P Supply: Qs = -100 + 14 P -What would be the equilibrium price for used cars?

Use the following information to answer the questions that follow. Market for a new hardcover book: Demand: Q_d = 325 - 8 P Supply: Q_s = -60 + 3 P -What would be the quantity supplied if a price floor is set at $20?

Use the following information to answer the questions that follow. Market for flat-screen TVs: Demand: Q_d = 2,600 - 5 P Supply: Q_s = -1,000 + 10 P -What would be the equilibrium quantity for flatscreen TVs?

Use the following information to answer the questions that follow. Market for flat-screen TVs: Demand: Q_d = 2,600 - 5 P Supply: Q_s = -1,000 + 10 P -What would be the quantity demanded if a price floor is set at $100?

The government has imposed a price control for many agricultural products in an effort to support farmers.In the case of price floor P₂ in the accompanying figure,how much of a disequilibrium in quantity exists?

Use the following information to answer the questions that follow. Market for flat-screen TVs: Demand: Q_d = 2,600 - 5 P Supply: Q_s = -1,000 + 10 P -What would be the quantity demanded if a price floor is set at $300?

Use the following information to answer the questions that follow. Market for used cars: Demand: Q_d = 154,000 - 86 P Supply: Q_s = -100 + 14 P -What would be the equilibrium quantity for used cars?

Use the following information to answer the questions that follow. Market for used cars: Demand: Q_d = 154,000 - 86 P Supply: Q_s = -100 + 14 P -What would be the quantity supplied if a price floor is set at $100?

Use the following information to answer the questions that follow. Market for used cars: Demand: Q_d = 154,000 - 86 P Supply: Q_s = -100 + 14 P -What would be the quantity supplied if a price floor is set at $2,000?

Use the following information to answer the questions that follow. Market for a new hardcover book: Demand: Q_d = 325 - 8 P Supply: Q_s = -60 + 3 P -What would be the quantity supplied if a price floor is set at $50?

Use the following information to answer the questions that follow. Market for a new hardcover book: Demand: Q_d = 325 - 8 P Supply: Q_s = -60 + 3 P -What would be the equilibrium quantity for hardcover books?

Use the following information to answer the questions that follow. Market for a new hardcover book: Demand: Q_d = 325 - 8 P Supply: Q_s = -60 + 3 P -What would be the equilibrium price for hardcover books?

Use the following information to answer the questions that follow. Market for used cars: Demand: Q_d = 154,000 - 86 P Supply: Q_s = -100 + 14 P -What would be the equilibrium price for used cars?