Question 1

Table 6-2 
-Refer to Table 6-2. A price floor set at $20 results in
A)75 units sold.
B)125 units sold.
C)200 units sold.
D)275 units sold.

Accepted Answer

The answer of Table 6-2 
-Refer to Table 6-2. A...

Question 2

Table 6-1 
-Refer to Table 6-1. Suppose the government imposes a price floor of $70 on this market. What will be the size of the surplus in this market?
A)0 units
B)400 units
C)600 units
D)1000 units

Accepted Answer

At a price of $70, the quantity demanded is 400 units and the quantity supplied is 1000 units. Therefore, there will be a surplus of 600 units.

Question 3

Table 6-1 
-Refer to Table 6-1. Which of the following price floors would be binding in this market?
A)$70
B)$60
C)$50
D)$40

Accepted Answer

A price floor is binding when it is set above the equilibrium price. In this case, the equilibrium price is $60 (where quantity demanded equals quantity supplied). Both a price floor of $50 and $40 are below the equilibrium price and therefore not binding. A price floor of $60 is simply the equilibrium price and has no effect on the market. Only a price floor of $70 is set above the equilibrium price and would be binding, leading to a surplus of 50 units (quantity supplied minus quantity demanded).

Question 4

Table 6-3
The following table contains the demand schedule and supply schedule for a market for a particular good. Suppose sellers of the good successfully lobby Congress to impose a price floor $2 above the equilibrium price in this market. 
-Refer to Table 6-3. How many units of the good are sold after the imposition of the price floor?
A)5
B)9
C)10
D)15

Accepted Answer

The answer of Table 6-3
The following table contains the demand...

Question 5

Figure 6-15 
-Refer to Figure 6-15. For a price floor to be binding in this market, it would have to be set at
A)any price below $3.
B)a price between $2 and $3.
C)a price between $3 and $4.
D)any price above $3.

Accepted Answer

The answer of Figure 6-15 
-Refer to Figure 6-15. For...

Question 6

Table 6-1 
-Refer to Table 6-1. Which of the following price ceilings would be binding in this market?
A)$80
B)$70
C)$60
D)$50

Accepted Answer

The answer of Table 6-1 
-Refer to Table 6-1. Which...

Question 7

Table 6-1 
-Refer to Table 6-1. Suppose the government imposes a price floor of $30 on this market. What will be the size of the surplus in this market?
A)0 units
B)200 units
C)1800 units
D)2000 units

Accepted Answer

The answer of Table 6-1 
-Refer to Table 6-1. Suppose...

Question 8

Figure 6-15 
-Refer to Figure 6-15. Suppose a price ceiling of $2 is imposed on this market. As a result,
A)the quantity of the good supplied decreases by 30 units.
B)the demand curve shifts to the left so as to now pass through the point (quantity = 30, price = $2).
C)buyers' total expenditure on the good decreases by $75.
D)buyers' total expenditure on the good falls by $15.

Accepted Answer

The answer of Figure 6-15 
-Refer to Figure 6-15. Suppose...

Question 9

Table 6-2 
-Refer to Table 6-2. A price floor set at $20 will
A)be binding and will result in a surplus of 75 units.
B)be binding and will result in a surplus of 125 units.
C)be binding and will result in a surplus of 200 units.
D)not be binding.

Accepted Answer

A price floor set at $20 will be binding because it is above the equilibrium price of $16.50. The quantity demanded at this price is only 225 units, while the quantity supplied is 350 units. This means that there will be a surplus of 125 units. Therefore, option B is the correct answer.

Question 10

Table 6-2 
-Refer to Table 6-2. A price ceiling set at $20 will
A)be binding and will result in a shortage of 75 units.
B)be binding and will result in a shortage of 200 units.
C)be binding and will result in a shortage of 125 units.
D)not be binding.

Accepted Answer

The answer of Table 6-2 
-Refer to Table 6-2. A...

Question 11

Table 6-2 
-Refer to Table 6-2. A price floor set at $5 will
A)be binding and will result in a surplus of 50 units.
B)be binding and will result in a surplus of 250 units.
C)be binding and will result in a surplus of 300 units.
D)not be binding.

Accepted Answer

The answer of Table 6-2 
-Refer to Table 6-2. A...

Question 12

Table 6-1 
-Refer to Table 6-1. Suppose the government imposes a price ceiling of $70 on this market. What will be the size of the shortage in this market?
A)0 units
B)400 units
C)600 units
D)1000 units

Accepted Answer

The answer of Table 6-1 
-Refer to Table 6-1. Suppose...

Question 13

Table 6-2 
-Refer to Table 6-2. A price ceiling set at $5 results in
A)50 units sold.
B)250 units sold.
C)300 units sold.
D)350 units sold.

Accepted Answer

The answer of Table 6-2 
-Refer to Table 6-2. A...

Question 14

Figure 6-16 
-Refer to Figure 6-16. In this market, a minimum wage of $7.25 is
A)binding and creates a labor shortage.
B)binding and creates unemployment.
C)nonbinding and creates a labor shortage.
D)nonbinding and creates neither a labor shortage nor unemployment.

Accepted Answer

The answer of Figure 6-16 
-Refer to Figure 6-16. In...

Question 15

Table 6-1 
-Refer to Table 6-1. Suppose the government imposes a price ceiling of $40 on this market. What will be the size of the shortage in this market?
A)0 units
B)400 units
C)1200 units
D)1600 units

Accepted Answer

The answer of Table 6-1 
-Refer to Table 6-1. Suppose...

Question 16

Figure 6-15 
-Refer to Figure 6-15. Suppose a price floor of $4 is imposed on this market. As a result,
A)buyers' total expenditure on the good decreases by $15.
B)the supply curve shifts to the left so as to now pass through the point (quantity = 30, price = $4).
C)the quantity demanded of the good decreases by 30 units.
D)the number of units sold in the market will increase by 15 units.

Accepted Answer

The answer of Figure 6-15 
-Refer to Figure 6-15. Suppose...

Question 17

Figure 6-16 
-Refer to Figure 6-16. In this market, a minimum wage of $2.75 is
A)binding and creates a labor shortage.
B)binding and creates unemployment.
C)nonbinding and creates a labor shortage.
D)nonbinding and creates neither a labor shortage nor unemployment.

Accepted Answer

The answer of Figure 6-16 
-Refer to Figure 6-16. In...

Question 18

Figure 6-16 
-Refer to Figure 6-16. In this market, a minimum wage of $7.25 creates a labor
A)shortage of 2,250 workers.
B)shortage of 4,500 workers.
C)surplus of 2,250 workers.
D)surplus of 4,500 workers.

Accepted Answer

The answer of Figure 6-16 
-Refer to Figure 6-16. In...

Question 19

Table 6-2 
-Refer to Table 6-2. A price ceiling set at $5 will
A)be binding and will result in a shortage of 50 units.
B)be binding and will result in a shortage of 250 units.
C)be binding and will result in a shortage of 300 units.
D)not be binding.

Accepted Answer

The answer of Table 6-2 
-Refer to Table 6-2. A...

Question 20

Figure 6-16 
-Refer to Figure 6-16. In this market, a minimum wage of $2.75 creates a labor
A)shortage of 2,250 workers.
B)shortage of 4,500 workers.
C)surplus of 2,250 workers.
D)neither a labor shortage nor surplus.

Accepted Answer

The answer of Figure 6-16 
-Refer to Figure 6-16. In...

Quiz 6: Supply, Demand, and Government Policies

Table 6-2 -Refer to Table 6-2. A price floor set at $20 results in

Table 6-1 -Refer to Table 6-1. Suppose the government imposes a price floor of $70 on this market. What will be the size of the surplus in this market?

Table 6-1 -Refer to Table 6-1. Which of the following price floors would be binding in this market?

Figure 6-15 -Refer to Figure 6-15. For a price floor to be binding in this market, it would have to be set at

Table 6-1 -Refer to Table 6-1. Which of the following price ceilings would be binding in this market?

Table 6-1 -Refer to Table 6-1. Suppose the government imposes a price floor of $30 on this market. What will be the size of the surplus in this market?

Figure 6-15 -Refer to Figure 6-15. Suppose a price ceiling of $2 is imposed on this market. As a result,

Table 6-2 -Refer to Table 6-2. A price floor set at $20 will

Table 6-2 -Refer to Table 6-2. A price ceiling set at $20 will

Table 6-2 -Refer to Table 6-2. A price floor set at $5 will

Table 6-1 -Refer to Table 6-1. Suppose the government imposes a price ceiling of $70 on this market. What will be the size of the shortage in this market?

Table 6-2 -Refer to Table 6-2. A price ceiling set at $5 results in

Figure 6-16 -Refer to Figure 6-16. In this market, a minimum wage of $7.25 is

Table 6-1 -Refer to Table 6-1. Suppose the government imposes a price ceiling of $40 on this market. What will be the size of the shortage in this market?

Figure 6-15 -Refer to Figure 6-15. Suppose a price floor of $4 is imposed on this market. As a result,

Figure 6-16 -Refer to Figure 6-16. In this market, a minimum wage of $2.75 is

Figure 6-16 -Refer to Figure 6-16. In this market, a minimum wage of $7.25 creates a labor

Table 6-2 -Refer to Table 6-2. A price ceiling set at $5 will

Figure 6-16 -Refer to Figure 6-16. In this market, a minimum wage of $2.75 creates a labor