Test3_practicequestions(1)

# Refer to the following diagram j theib52s7upply

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Unformatted text preview: grams. 1?!! (('*/0)'8/(!;2'I(+>,! f existing / B) ensure that when entry occurs, producer surplus will not be zero. =?!! ((!'@!0.+!/I'B+\$! E C) ensure that when entry occurs, producer surplus will be positive. E8,7+2Fhat !consumer surplus is greater in the future. = D) ensure t !!! !"#\$%&!!! "(\$%\$)*!+,-+!./)-+)!-!0)12)! ' 34)*+\$"5!6+-+4*&!!! )7\$*)1! 9 Questions 15-24 refer to the following diagram: ! ! J?!! The/I'B+!@)5:2+s,.'7,!upply and demand curves for a!partment units in a large !city. If t!*)0<\$!H@!0.+! 16.-.+! above figure ! hows s ,:;;(<!/84!4+>/84!*:2B+, @'2!/;/20>+80!:8)0,!)8 /!(/25+ he city government passes a law /!(/7!0./0!+,0/I(),.+,er month as the legal !maximum >/C)>:>!2+80M!0.+! *)0<!5'B+28>+80!;/,,+,! that establishes \$350 p !KJ%L!;+2!>'80.!/, 0.+!(+5/(! rent, the loss in !)8!,'*)/(!7+(@/2+!+D:/(,! (',,social welfare equals A ) b + c. E?!! !"!*\$! I B ) f. @ C) a. 6?!! \$! 1?!! \$! D) f + g./ =?!! !"!5\$! @ 17) The above! figure shows supply and demand curves for apartment units in a large city. If the E8,7+2F!!! = city government!+,-+!./)-+)!-!0)12)!stablishes \$350 per month as the legal maximum rent, !"#\$%&!!! "(\$%\$)* passes a law that e ' deadweight!6+-+4*&ccurs because ! 34)*+\$"5 loss o !!! /)7\$"4*!81\$+\$"5 ' A) consumers place a greater value on the last apartment unit than the cost to supply it. !"! B) the supplier of the last apartment unit receives a rental price that is less than the marginal cost of supplying it. C) the quantity of apartments supplied has decreased. D) All of the above. 18) The above figure shows supply and demand curves for apartment units in a large city. If the city government passes a law that establishes \$350 per month as the legal maximum rent, the consumer’s net gain in surplus equals A ) c - f. B ) b - f. C ) d - f. D) The answer cannot be determined from the information given. 19) The above figure shows supply and demand curves for apartment units in a large city. If the city government passes a law that establishes \$350 per month as the legal maximum rent, producer surplus A) increases. B) decreases. C) stays the same. D) changes in a direction that cannot be determined from the information given. 20). The above figure shows supply and demand curves for apartment units in a large city. If the city government passes a law that establishes \$350 per month as the legal maximum rent, producer surplus decreases by A ) d. B ) b + f. C ) c + g. D ) i. 21) The above figure shows supply and demand curves for apartment units in a large city. If the city government passes a law that establishes \$350 per month as the legal maximum rent, producer surplus will be A ) d. B ) d + e. C ) d + g. D ) d + c + g. 22) The above figure shows supply and demand curves for apartment units in a large city. At the unregulated equilibrium, producer surplus will be A ) d. B ) d + e. C ) d + g. D ) d + c + g. 23) The above f...
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## This note was uploaded on 09/29/2013 for the course ECON 201 taught by Professor Maxli during the Winter '13 term at Massey Palmerston North.

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