Economics 1021A/B Lecture 13: Economics 1021A - Lecture 13

99 views6 pages

Verified Note

oliveshark818

22 Oct 2018

School

Department

Course

Professor

For unlimited access to Class Notes, a Class+ subscription is required.

ECON 1021A/B verified notes

13/25View all

Economics 1021A/B Lecture Notes - Lecture 12: Production Quota, Marginal Cost

Economics 1021A/B Lecture 13: Economics 1021A - Lecture 13

Economics 1021A/B Lecture Notes - Lecture 14: Broccoli, Real Income, Relative Price

Document Summary

Lecture 13: chapter 6 government actions in markets (cid:894)con"t(cid:895) Announcements: you will get your exam marks by next monday at the latest (they will be emailed to you) This also generated a black market because some people are willing to pay more than the rent ceiling. It does(cid:374)"t (cid:373)atter if the go(cid:448)er(cid:374)(cid:373)e(cid:374)t de(cid:272)ides to ta(cid:454) sellers or (cid:271)u(cid:455)ers the government cannot decide who pays the tax. Who pays tax will be determined by the elasticity of supply and inelasticity of demand: the government says the seller has to pay the tax. If the government decided to make the sellers pay the tax, the price would be at the intersection of the supply and demand curve: eg. at /pack, we will sell 350 million packs/year. The supply curve will shift up by the amount of the tax: the new equilibrium changes. The equilibrium quantity decreases, and the price the buyer pays goes up to at 325 million packs/year.

Related Questions

Question 1

The shortage in apartments causes by rent control is worse...

		In the long-run, because the long-run supply is more elastic.
		In the long-run, because the long-run supply is less elastic.
		In the short-run, because the short-run supply is more elastic.
		In the short-run, because the short-run supply is less elastic.

2 points

Question 2

Airline regulation of the 1970s produced a similar result to which of the following government interventions?

		Communism
		Rent control laws
		The Affordable Care Act
		Minimum wage laws

2 points

Question 3

What is a price floor?

		A maximum price allowed by law.
		A minimum price allowed by law.
		A maximum price consumers are willing to pay.
		A minimum price consumers are willing to pay.

2 points

Question 4

In 1938, Congress set the first minimum wage at $0.25 per hour. While this was a modest price floor for the country, it was a very large increase for what US territory which was not exempt from the law?

		Arizona
		Puerto Rico
		Cuba
		Hawaii

2 points

Question 5

Which of the following is a possible effect of a price ceiling?

		A surplus of the good.
		Increases in product quality.
		Increased gains from trade.
		People will waste time in lines waiting to purchase the good.

2 points

Question 6

Which of the following is a possible effect of a price floor?

		Decreases in product quality.
		The quantity supplied exceeds the quantity demanded.
		Increased gains from trade.
		A shortage of the good.

2 points

Question 7

Which of the following is a possible effect of a price ceiling?

		Increased gains from trade.
		Increases in product quality.
		A surplus of the good.
		The quantity demanded exceeds the quantity supplied.

1.Under rent controls, Select one:

a. the quantity supplied of rental units is greater than it would be under freely competitive markets.

b. there is a shortage of rental units.

c. there is less government involvement in rental markets overall because there is a better supply of low-income housing.

d. all renters are better off than under freely competitive markets.

2.Which of the following is NOT a function of rental prices?

Select one:

a. To stimulate the construction of new housing

b. To allocate existing scarce housing among different people

c. To provide housing to individuals below market value

d. To ration the existing housing stock

3. price floors are designed to

a. establish a minimum allowable price

b. create shortages when none existed before

c. none of these

d. allow free market prices to be achieved

4.what are the effects of an increase in the minimum wage? who would be most affected?

5. the minimum wage laws seek to

a. help teenagers find work

b. assure that all workers are paid the same wage rate

c. assure a minimum standard of payment for work

d. penalize employers that are not complying with labor laws

6. A black market s a market in which

a. goods are sold at outlet prices

b. sales taxes are effectively doubled

c. sales take place exclusively at outlet prices.

d. goods are traded at price above their legal maximum prices

viridianalpaca10

Question 1

During a crisis such as Hurricane Katrina, governments often make it illegal to raise the price of emergency items like flashlights and bottled water. In practice, this means that these items get sold on a first-come, first-served basis. If a person has a flashlight that she values at $5, but its price on the black market is $40, what gains from trade are lost if the government shuts down the black market?

		$30
		$35
		$40
		Indeterminant with the given information.

2 points

Question 2

Which of the following is an example of a price floor?

		A sale price with a limit on the quantity you can purchase.
		Rent-controlled apartments
		Predatory pricing designed to put a competitor out of business.
		The minimum wage

2 points

Question 3

Airline regulation of the 1970s produced a similar result to which of the following government interventions?

		The Affordable Care Act
		Minimum wage laws
		Rent control laws
		Communism

2 points

Question 4

Which of the following is a possible effect of a price ceiling?

		A surplus of the good.
		Increases in product quality.
		Increased gains from trade.
		People will waste time in lines waiting to purchase the good.

2 points

Question 5

What is a price ceiling?

		A minimum price consumers are willing to pay.
		A minimum price allowed by law.
		A maximum price allowed by law.
		A maximum price consumers are willing to pay.

2 points

Question 6

Why are the long lines generated by a shortage worse than paying a higher price in money?

		It is not better or worse. Paying in time and paying in money are essentially the same in a market economy.
		Paying with time reduces the value of money, and prevents valuable trades from occurring.
		Waiting in line is a waste of a valuable resource: time. Paying a price in money transfers the value of resources from one person to another, and maximizes the value of resources.
		Paying with time gives those who do not work an advantage over those who do.

2 points

Question 7

Which of the following is a possible effect of a price floor?

		The quantity supplied exceeds the quantity demanded.
		Increased gains from trade.
		Decreases in product quality.
		A shortage of the good.

Economics 1021A/B Lecture 13: Economics 1021A - Lecture 13

Economics 1021A/B Lecture Notes - Lecture 12: Production Quota, Marginal Cost

Economics 1021A/B Lecture 13: Economics 1021A - Lecture 13

Economics 1021A/B Lecture Notes - Lecture 14: Broccoli, Real Income, Relative Price

Document Summary

Get access

Related Documents

Economics 1021A/B Lecture Notes - Lecture 6: Equilibrium Point, Economic Equilibrium, Price Ceiling

Economics 1021A/B Chapter Notes - Chapter 6: Market Price, Economic Equilibrium, Economic Surplus

Economics 1021A/B Chapter Notes - Chapter 6: Economic Equilibrium, Social Cost, Equilibrium Point

Related Questions