Essentials of Economics (MindTap Course List)
7th Edition
ISBN: 9781285165950
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 6, Problem 1QCMC
To determine
The impact of a binding
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What happens if an effective price floor is placed on the market for steel?
a.
There will be a surplus of steel.
b.
The price of steel will be lower than the equilibrium price.
c.
The quality of steel produced will decrease.
d.
There will be a shortage of steel.
Graph the following:
A. People of town X move to town Y. Supply in town X remains the same. Show effects on market price and demand in the former
B. Market price of palay is Pl5/kilo, Government increases it to P20/kilo. Show effects
C. A bountiful harvest of rice in the latest harvest season. With demand remaining the same show effects on market price and supply curve.
Which of the following would increase quantity supplied, increase quantity demanded, and decrease the price that consumers pay?a. the imposition of a binding price floorb. the removal of a binding price floorc. the passage of a tax levied on producersd. the repeal of a tax levied on producers
Chapter 6 Solutions
Essentials of Economics (MindTap Course List)
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- An increase in an effective price ceiling will do what in the relevant market? a. The surplus will increase.b. The surplus will decrease.c. The shortage will increase.d. The shortage will decrease.arrow_forward________When there is a shortage of citrus fruit, the economic forces of supply and demand would suggest that a. price will stay constant. b. price will decrease. c. price will increase. d. price, all things remaining equal, will increase. e. it will take a long time before the shortage is felt in the market.arrow_forwardIn a competitive market, if the government imposes a price ceiling below the equilibrium price, what is likely to happen?A. Surplus of goods B. Shortage of goods C. No change in quantity exchangedD. Price remains the samearrow_forward
- When a market is at equilibrium, A B C D sellers are willing to sell less than consumers are willing to buy. sellers are willing to sell more than consumers are willing to buy. neither consumers nor producers are satisfied with the quantity traded. both producers and consumers are satisfied with the quantity traded.arrow_forwardWhich of the following would Increase quantitysupplied, mcrease quantity demanded, and decreasethe price that consumers pay?a. the imposition of a bmding price floorb. the removal of a binding price floorc. the passage of a tax levied on producersd. the repeal of a tax levied on producersarrow_forwardThe government imposes a price ceiling below the equilibrium price. Which of the following are the effects of this price ceiling? A. Shortage B. Deadweight loss C. Inefficiently low quality of the good D. Both A and B E. All of the above F. None of the abovearrow_forward
- If a municipality sets a price ceiling below equilibrium for apartments in New York City, Select one: a. the price ceiling will create a surplus of apartments b. the price ceiling will create a shortage of apartments c. the price ceiling will not affect the market for apartments d. the market for more broadway plays will increase Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.arrow_forward1. When a price ceiling is imposed in a market, a. a persistent shortage results b. a persistent surplus results c. sellers of the product are made better off d. no one is made better off e. quantity supplied is greater than the quantity demanded 2. All of the following are problems associated with price ceilings except a. chronic excess demand b. an eventual decline in the number of suppliers c. the need to use ration coupons to purchase the good d. chronic excess supply e. landlords failing to maintain rent-controlled properties adequately 3. When a price floor is imposed, it has an impact on a market if it is set a. below the equilibrium price b. at the equilibrium price c. above the equilibrium price because quantity demanded exceeds quantity supplied d. above the equilibrium price because quantity supplied exceeds quantity demanded e. below the equilibrium price because quantity demanded exceeds quantity supplied 4. One lesson to be drawn from our discussion of price ceilings…arrow_forwardIf a price ceiling is set below the equilibrium price in a market, A. raioning will be necessary. B. surpluses of the commodity will develop. C. the quantity demanded will exceed the quantity supplied. D. tje quantity supplied willexceed the quantitiy demanded.arrow_forward
- When the government imposes a binding price floor,it causesa. the supply curve to shift to the left.b. the demand curve to shift to the right.c. a shortage of the good to develop.d. a surplus of the good to developarrow_forwardConsumers in Nashville purchase fresh tomatoes in the summer. Consumers in Clarksville (nearby) purchase even more tomatoes. Assuming competitive markets, what should happen in Clarksville if Nashville places a tax on Nashville tomato sellers? a. The equilibrium quantity of tomatoes in Clarksville will increase; the equilibrium price will increase. b. The equilibrium quantity of tomatoes in Clarksville will decrease; the equilibrium price will decrease. c. The equilibrium quantity of tomatoes in Clarksville will decrease; the equilibrium price will increase. d. The equilibrium quantity of tomatoes in Clarksville will increase; the equilibrium price will decrease. e. Nothing will likely change in the Clarksville market.arrow_forwardWhich of the following will cause a decrease in consumer surplus? a. an increase in the number of sellers of the good b. a decrease in the production cost of the good c. sellers expect the price of the good to be lower next month d. the imposition of a binding price floor in the marketarrow_forward
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