Chapter 5 - Name Date 1 A price floor in the market for wheat A increases the price paid by consumers B decreases the price paid by consumers C

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Name: __________________________ Date: _____________ 1. A price floor in the market for wheat: A) increases the price paid by consumers. B) decreases the price paid by consumers. C) decreases the price received by farmers. D) does not change the price received by farmers. Use the following to answer question 2: 2. (Table: Market for Fried Twinkies) Using the table, if the government imposes a quota on the fried Twinkie market of 5,000, the quota rent (per fried Twinkie) collected by the fried Twinkie producers will be: A) $1.20. B) $0.30. C) $1.50. D) $1.00. Page 1
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Use the following to answer question 3: Figure: Market for Hotel Rooms 3. (Figure: Market for Hotel Rooms) The local government limits the number of hotel rooms rented each night to 150. The resulting quota rent per room is equal to: A) $130. B) $100. C) $110. D) $30. Use the following to answer question 4: 4. (Table: Quantity Supplied and Quantity Demanded) A government institutes a price control and as a result too many resources are allocated for the production of a good. The price control in this market is equal to: A) $5. B) $10. Page 2
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C) $15. D) $20. 5. Which of the following is an example of a black market? A) a tenant in a rent-controlled apartment subletting at a higher rent B) the purchase of an inferior radio at a department store C) waiting in line during the gasoline shortages of the 1970s D) the oil market Use the following to answer question 6: Figure: Market for Hybrid Cars 6. (Figure: Market for Hybrid Cars) If there is a binding price ceiling in the market for hybrid cars, the price would be equal to ________, consumers would demand ________, and producers would supply ________. A) P 1 ; Q 1 ; Q 3 B) P 2 ; Q 2 ; Q 2 C) P 1 ; Q 3 ; Q 1 D) P 3 ; Q 3 ; Q 1 Page 3
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7. If the government imposes a limit on sales of a good or service by issuing a license that gives the owner the right to sell a given quantity of the good, the difference between the
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This note was uploaded on 02/18/2012 for the course ECON 102 taught by Professor Kim during the Fall '08 term at University of Illinois, Urbana Champaign.

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Chapter 5 - Name Date 1 A price floor in the market for wheat A increases the price paid by consumers B decreases the price paid by consumers C

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