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European governments hiring the surplus of workers. (True Answer )Correct309 A binding price floor causes: a shortage in the market. Incorrecta surplus in the market. Incorrectwasted resources. Incorrecta surplus in the market and wasted resources. (True Answer )Correct310 Suppose that a binding price floor is in place in a particular market. If the market is deregulated and the price floor is removed, which of the following effects could occur? The quantity demanded would decrease and the quantity supplied would increase. IncorrectAn excess demand would develop. IncorrectThere would be a decrease in the quality of the good supplied. (True Answer )CorrectThere would be an increase in the quality of the good supplied. Incorrect311 One of the consequences of the minimum wage has been: decreased unemployment for low-skill workers. Incorrectworkers offering to work off the books for less than the minimum wage. (True Answer )Correctlower production costs for small businesses. Incorrectincreased employment for high-skill workers. Incorrect312 Price controls: always increase economic efficiency. Incorrectalways lead to more equitable results. Incorrectcan result in inequitable outcomes. (True Answer )Correctare always set below the equilibrium price. Incorrect313 Producers may supply a good with an inefficiently high quality if the government imposes: a price control. Incorrect
an excise tax. Incorrecta binding price floor. (True Answer )Correcta binding price ceiling. Incorrect314 In Europe the minimum wage has led to: lower unemployment, especially among young workers. Incorrecta proliferation of large companies in Italy. Incorrectwidespread evasion of the minimum wage law in the black market for labor. (True Answer )CorrectEuropean governments hiring the surplus of workers. Incorrect315 A price floor is likely to cause deadweight loss because: buyers incur additional search costs looking for the scarce good. Incorrectthe quantity of the good being bought and sold is less than the equilibrium quantity. (True Answer )Correcta black market emerges and sellers sell the good at prices above the price floor. Incorrectsome buyers who want to buy at the controlled price are unable to find a seller willing to sell at that price. Incorrect316 Which is notan inefficiency caused by price floors? inefficiently low quality (True Answer )Correctinefficient allocation of sales among sellers Incorrectwasted resources Incorrectillegal activity Incorrect317 Figure: The Market for Hybrid Cars
Reference: Ref 5-21 (Figure: The Market for Hybrid Cars) Look at the figure The Market for Hybrid Cars. What area represents consumer surplus if there is a binding price floor at P1?