Question

In general, what is a price ceiling?

Group of answer choices

A price ceiling sets the maximum price at which a good can be legally sold.

A price ceiling sets the minimum price at which a good can be legally sold.

A price ceiling comes in the form of a minimum wage

none of the above

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Question 21 pts

In general, what is a price floor?

Group of answer choices

A price floor sets the maximum price at which a good can be legally sold.

A price floor sets the minimum price at which a good can be legally sold.

A price floor comes in the form of a rent control

none of the above

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Question 30.5 pts

In general, the goal of a price ceiling is to

Group of answer choices

decrease the price

increase the price

enhance efficiency

none of the above

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Question 40.5 pts

In general, the goal of a price floor is to

Group of answer choices

decrease the price

increase the price

enhance efficiency

none of the above

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Question 52 pts

Questions 5 to 7refer to the following.

• Instruction: To answer the questions, refer to the attached PDF file labeled “rent ceiling.” rent ceiling.pdf
• Scenario: Assume that the graph characterizes the market for rental apartments in a certain city. The vertical axis pertains to the monthly rent (measured in ‘00 dollars) and the horizontal axis pertains to the number of apartments.

Question 5 . What are the equilibrium rent and equilibrium quantity of rental apartments?

Group of answer choices

Rent

      [ Choose ]            15            $500            20            $250      

Quantity

      [ Choose ]            15            $500            20            $250      

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Question 62 pts

Suppose that the government places a rent ceiling of $300 a month. Under this scenario:

1. What is quantity demanded for rental apartments?
2. What is quantity supplied of rental apartments?
3. Would there be a surplus or shortage of apartments for rent?
4. How many apartments are in surplus or shortage, if any?

Group of answer choices

Quantity demanded QD

      [ Choose ]            10            20            21            15            9            We have a surplus of apartments            We have a shortage of apartments            12      

Quantity supplied QS

      [ Choose ]            10            20            21            15            9            We have a surplus of apartments            We have a shortage of apartments            12      

Do we have a surplus or shortage of apartments?

      [ Choose ]            10            20            21            15            9            We have a surplus of apartments            We have a shortage of apartments            12      

How many apartments?

      [ Choose ]            10            20            21            15            9            We have a surplus of apartments            We have a shortage of apartments            12      

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Question 72 pts

How many apartments will be rented if the government places a rent ceiling of $700 a month, instead of $300? Explain.

Note: Unlike in the previous rent ceiling of $300, observe that this rent ceiling of $700 is higher than the equilibrium rent. Recall our discussion that when a rent ceiling is placed above the equilibrium, it will not have an effect on the market.

Group of answer choices

How many?

      [ Choose ]            A rent ceiling placed above equilibrium is binding            20            A rent ceiling placed above equilibrium is not binding            15      

Explain

      [ Choose ]            A rent ceiling placed above equilibrium is binding            20            A rent ceiling placed above equilibrium is not binding            15      

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Question 82 pts

Questions 8 to 10 refer to the following.

• Instruction: To answer the questions, refer to the attached PDF file labeled “minimum wage." minimum wage.pdf
• Scenario: Assume that the graph describes the labor market in a certain city. The price axis pertains to the wage rate (in dollars) and the quantity axis pertains to the number of workers.

Question 8. What are the equilibrium wage rate and equilibrium number of workers hired?

Group of answer choices

Wage rate

      [ Choose ]            30            $10            $5            15      

Number of workers

      [ Choose ]            30            $10            $5            15      

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Question 92 pts

Suppose that workers lobby for a higher wage rate. The local government obliges and sets a minimum wage rate of $8. Under this scenario:

1. What is quantity demanded for labor?
2. What is quantity supplied of labor?
3. Would there be a surplus or shortage of labor?
4. How many workers are in surplus or shortage, if any?

Group of answer choices

Quantity demanded QD

      [ Choose ]            6            18            24            We have a shortage of labor            20            25            5            We have a surplus of labor      

Quantity supplied QS

      [ Choose ]            6            18            24            We have a shortage of labor            20            25            5            We have a surplus of labor      

Do we have a surplus or shortage of labor?

      [ Choose ]            6            18            24            We have a shortage of labor            20            25            5            We have a surplus of labor      

How many?

      [ Choose ]            6            18            24            We have a shortage of labor            20            25            5            We have a surplus of labor      

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Question 102 pts

How many people will be employed if the government sets the minimum wage at $3 instead of $8? How many people will be unemployed?

Note: Unlike in the previous minimum wage of $8, observe that this minimum wage of $3 is lower than the equilibrium wage. Recall our discussion that a minimum wage placed below equilibrium will not have an effect on the market.

Group of answer choices

How many will be employed?

      [ Choose ]            20            15            0            8            10      

How many will be unemployed?

      [ Choose ]            20            15            0            8            10      

Answer 1

A price ceiling sets the maximum price at which a good can be legally sold.

It is the maximum price that can be charged by a seller for a particular good or service by law.

21. A price floor sets the minimum price at which a good can be legally sold.

It is the minimium legal price that can be charged by a seller for a particular commodity to be sold. In order to be effective it should be higher than the equilibrium price.

30. decrease the price

It prevents the price of a particular good from rising above a certain level so as to make it affordable to the general public.

40. increase the price.

It is the process of government intervention to increase market prices if the price of a particular good is too low.