The government imposes a price ceiling below the equilibrium price. The price ceiling will cause:
a shortage of the good.
(Figure and Table: Market for Apartments) This figure represents a competitive market for apartments. If a government price ceiling at $700 is now imposed on this market (in the name of fairness), then an inefficiency will result in the form of a:
shortage of 0.6 million apartments.
(Figure and Table: Market for Apartments) This figure represents a competitive market for apartments. If a government price ceiling at $900 is now imposed on this market (in the name of fairness), then an inefficiency will result in the form of a:
shortage of 0.2 million apartments.
If the government feels that a price in the market is too high for the ________, it can impose a ________.
consumers; price ceiling
To be binding, a price ceiling must be set at a price:
lower than the equilibrium price or at a price at which quantity demanded exceeds quantity supplied.
If wages are set above the equilibrium wage in the market, then the number of workers hired will depend upon:
(Figure: Market I) If a price floor of $15 was imposed on this market, government would need to buy ________ units of the good, and spend a total amount of ________ on its purchase.
(Figure: Market I) If a price floor of $6 was imposed on this market, this would:
have no effect on this market.
An effective price ceiling will most likely result in which of the following?
an increase in consumer surplus
Price ceilings may be imposed if:
demanders can make strong moral or political arguments for lower prices.
(Table: The Market for Acupuncture) A small town has a thriving market for acupuncture treatments. In an effort to regulate this market, the town requires each acupuncture therapist to purchase a license. Initially, the government issues only enough licenses to provide for 20 treatments per month. This quota creates a quota rent equal to:
(Table: The Market for Acupuncture) The production quota of 20 acupuncture treatments prevents mutually beneficial transactions because there are ________ additional transactions that people would like to make but would not take place given the quota.