Price & Quantity Controls

Which letter corresponds with consumer surplus?

• A
• B
• C
• A & B

Which letter corresponds with producer surplus?

• A
• B
• C
• A & B

If the equilibrium price of the good increases to $4 because of an increase in demand, what happens to total producer surplus?

• It decreases
• It stays the same
• It increases

Assume an effective price floor is placed on the sale of this product. What is the new price & quantity purchased?

• P1, Q2
• P2, Q2
• P3, Q3
• P1, Q1

Assume an effective price floor is placed on the sale of this product. What letters correspond to the deadweight loss?

• ABC
• DEF
• CE
• BD

At the free market price, the quantity demanded is _____ and quantity supplied is _____. 

• 50, 120
• 120, 120
• 120, 50
• 50, 50

If the government creates a price ceiling of $30, which one of the following statements is correct?

• The quantity demanded = 60
• The quantity supplied = 160
• There is a surplus of 100
• There is a shortage of 100

If the government creates a price floor of $80, which one of the following statements is correct?

• The quantity demanded = 60
• The quantity supplied = 180
• There is a shortage of 140
• There price floor is ineffective

Suppose the mayor of this city imposes a price ceiling at $5.50. How large is the shortage of rides?

• 1 million
• 2 million
• 3 million
• 4 million

Suppose the mayor of this city sets a quota limit of rides at 10 million per year. What is the quota rent?

• $0.50
• $1.00
• $1.50
• $2.00