AssignmentVII

AssignmentVII - ARE 201: Introduction to Agricultural &...

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Spring 2008 1) A price ceiling A) is the price that exists in a black market. B) is the maximum price that can legally be charged. C) is an illegal price. D) Both answers A and B are correct. E) Both answers B and C are correct. Topic: Price ceiling 2) If a price ceiling is set above the equilibrium price, then A) the price ceiling affects suppliers but not demanders. B) there will be neither a shortage nor a surplus of the good. C) there will be a surplus of the good. D) the price ceiling will generate revenue for the government. E) there will be a shortage of the good. Topic: Price ceiling, shortage 3) A price ceiling in the market for fuel oil that is below the equilibrium price will A) lead to the quantity supplied of fuel oil exceeding the quantity demanded. B) decrease the demand for fuel oil. C) increase the supply of fuel oil. D) lead to the quantity demanded of fuel oil exceeding the quantity supplied. E) have no effect in the market for fuel oil. Topic: Price ceiling, shortage 1
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4) The figure above illustrates the bagel market. Which of the following statements is correct? A) With a price ceiling of $1.00 per bagel, the quantity demanded is equal to the quantity supplied. B) With a price ceiling of $3.00 per bagel, the quantity demanded is greater than the quantity supplied. C) With a price ceiling of $1.00 per bagel, there is a shortage of bagels. D) Answers A and B are correct. E) Answers B and C are correct. Topic: Price ceiling, shortage 5) Suppose the equilibrium rent in Denver is $1,050. A rent ceiling of $755 per month leads to A) compared to the situation at the equilibrium rent, a decrease in the quantity of apartments demanded and an increase in the quantity of apartments supplied. B) a shortage of apartments in Denver. C) a surplus of apartments in Denver. D) no change in the Denver apartment market. E) fair prices in the Denver market. Topic: Rent ceiling, shortage 6) One of the consequences of a rent ceiling set below the equilibrium rent is A) the establishment of landlord unions. B) the elimination of the deadweight loss that would otherwise exist in the housing market. C) surpluses of apartments. D) increased search activity. E) decreased search activity. Topic: Rent ceiling, search 2
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7) The deadweight loss in a housing market with a rent ceiling set below the equilibrium rent is the A) loss to tenants and the gain to landlords who have the incentive to offer more apartments for rent. B) loss to those who cannot find apartments and the loss to landlords who cannot offer housing at the lower rent ceiling. C) loss to those who cannot find apartments and the gain to landlords who charge black market rents. D) gain to landlords and to tenants because now a fairer rent is charged.
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This test prep was uploaded on 04/08/2008 for the course ARE 201 taught by Professor Eryuruk during the Spring '08 term at N.C. State.

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AssignmentVII - ARE 201: Introduction to Agricultural &...

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