Chapter 09 - Government in the Marketplace

Chapter 09 - Government in the Marketplace - Practice Test...

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Page 1 of 33 Practice Test Microeconomics: Theory and Policy Chapter 09: Government in the Market B. Modjtahedi Question 1 What is an effective price ceiling? A. A government-mandated price that is above the equilibrium price. B. A government-mandated price that is below the equilibrium price. C. A government-mandated price that is the same as the equilibrium price. D. Any of the above can qualify as an effective price ceiling. E. None of the above. Question 2 What is a price ceiling? A. A government-mandated price above which the equilibrium price cannot go. B. A government-mandated price below which the equilibrium price cannot drop. C. A government-mandated price aimed at keeping the market price high to protect producers. D. A government-mandated price aimed at keeping the market price equal to the equilibrium price. E. None of the above. $0 $4 $8 $12 $16 $20 $24 $28 $32 $36 $40 $44 0 10 20 30 40 50 60 70 80 90 100 110
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Page 2 of 33 Question 3 The figure above shows the supply and demand functions for a product produced in a perfectly competitive market. Currently the industry is in a state of long-run equilibrium. The total surplus equals: (use geometric formulas to calculate) A. $250 B. $500 C. $1000 D. $1500 E. None of the above. Question 4 The figure above shows the supply and demand functions for a product produced in a perfectly competitive market. Currently the industry is in a state of long-run equilibrium. The producers’ total revenue equals: (use geometric formulas to calculate) A. $250 B. $500 C. $1000 D. $1500 E. None of the above. Question 5 The figure above shows the supply and demand functions for a product produced in a perfectly competitive market. Currently the industry is in a state of long-run equilibrium. The government imposes a price ceiling of $12 on this product. The amount of shortage will equal: A. 20 units B. 40 units C. 60 units D. 80 units E. None of the above. Question 6 The figure above shows the supply and demand functions for a product produced in a perfectly competitive market. Currently the industry is in a state of long-run equilibrium. The government imposes a price ceiling of $12 on this product. The black market price will equal: A. $12 B. $20 C. $28 D. $40 E. None of the above. Question 7 The figure above shows the supply and demand functions for a product produced in a perfectly competitive market. Currently the industry is in a state of long-run equilibrium. The government imposes a price ceiling of $12 on this product. The producer surplus will equal: (use geometric formulas to calculate) A. $100 B. $180 C. $360 D. $720 E. None of the above.
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Page 3 of 33 Question 8 The figure above shows the supply and demand functions for a product produced in a perfectly competitive market. Currently the industry is in a state of long-run equilibrium. The government imposes a price ceiling of $12 on this product. The consumer surplus will equal: (use geometric formulas to calculate) A. $100 B. $180 C. $360 D. $660
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This note was uploaded on 11/08/2010 for the course ECN ECN 001A taught by Professor Scottcarrell during the Spring '10 term at UC Davis.

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Chapter 09 - Government in the Marketplace - Practice Test...

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