apartments are often in shorter supply than they would be without rent control. apartments usually rent for rates lower than the market rate. it usually takes more time to find an apartment than it would without rent control.
1 / 1 pts Question 7
________ refers to the reduction in economic surplus resulting from not being in competitive equilibrium.
Deadweight loss Correct!
Marginal cost Producer atrophy
1 / 1 pts Question 8
Refer to Figure 4-5. The figure above represents the market for pecans. Assume that this is a competitive market. If 4,000 pounds of pecans are sold,
marginal benefit is equal to marginal cost. the deadweight loss is equal to $12,000. Correct!
consumer surplus equals zero. the marginal benefit of each of the 4,000 pounds of pecans equals $3.
1 / 1 pts Question 9
Figure 4-9 shows the demand and supply curves for the almond market. The government believes that the equilibrium price is too low and tries to help
almond growers by setting a price floor at P .
Refer to Figure 4-9 . What area represents consumer surplus after the imposition of the price floor?
A + B + E + F A + B + E A Correct! Correct! A + B
1 / 1 pts Question 10
Suppose a price floor on sparkling wine is proposed by the Health Minister of the country of Vinyardia. What will be the likely effect on the market for sparkling
wine in Vinyardia?
Quantity demanded will increase, quantity supplied will decrease, and a surplus will result. Quantity demanded will decrease, quantity supplied will increase, and a surplus will result. Correct!
Quantity demanded will decrease, quantity supplied will increase, and a shortage will result. Quantity demanded will increase, quantity supplied will decrease, and a shortage will result.
1 / 1 pts Question 11
The minimum wage is an example of
a subsidy for low-skilled workers. a price ceiling. a price floor. Correct! Correct! a black market.
1 / 1 pts Question 12
Companies producing toilet paper bleach the paper to make it white. The bleach is discharged into rivers and lakes and causes substantial environmental
damage. Figure 4-21 illustrates the situation in the toilet paper market.
Refer to Figure 4-21. Let's suppose the government imposes a tax of $50 per unit of toilet paper to bring about the efficient level of production. What
happens to the market price of toilet paper?
It rises by more than $50 per unit. It rises by less than $50 per unit. Correct! It rises by $50 per unit. It remains the same because the tax is imposed on producers who create the externality.
1 / 1 pts Question 13
Chicken pox vaccinations for toddlers benefit society by protecting young children and by preventing an epidemic of the disease. Thus, the social benefits of
chicken pox vaccinations exceed the private benefit for any quantity of vaccinations as illustrated in Figure 4-22.
Refer to Figure 4-22. One way to obtain the economically efficient amount of chicken pox vaccinations is for governments to subsidize these vaccinations.
What is the size of the per-vaccination Pigovian subsidy that the government must provide to internalize the external benefits?