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WorksheetsENRM 1002 Quiz 1
Total questions: 15
Worksheet time: 15mins
Which of these is a true definition of market invention tools such as price controls and quotas?
Price controls are government rules or laws that deters the formation of market- determined prices. Quotas are physical restrictions on a company input.
Price controls are put in place to manage the quantity of supply whereas quotas determine the price ceiling of an item.
Price controls are utilized when the government intervenes to regulate prices. Quotas are used by the government to regulate the quantity of good that can be bought and sold rather than the price at which it is transacted
Quotas are implemented by Government by setting the price ceiling or price flooring on items in the market.
The likely reason that the government would implement a _____ is because it feels that the price is too low for _____.
Price Ceiling; consumers
Price floor; consumers
Price floor; consumers
Price floor; producers
Inefficient allocations of goods to consumers often result from:
Price surplus
Price ceilings
Equilibrium prices
Consumer Surplus
Which of the following may take place If the government imposes binding rent control in the form of a price ceiling:
It will create a surplus of housing
Rental units will be of higher quality because landlords are guaranteed a higher price.
Rent will be set above the equilibrium price
It may result in landlord leaving the business because they cannot cover cost.
Suppose the government sets a price floor below the current price of a good. This price floor will:
Result in an excess supply of the good.
Result in an excess demand for the good.
Have no effect on the price of the good.
Increase the quantity supplied of the good.
The market for Oranges is in equilibrium at a price of $0.70 per pound. If the government imposes a price floor in the market at a price of $0.60 per pound:
The price floor will not affect the market price or output
Quantity demanded will decrease
Quantity supply will increase
There will be a shortage of oranges
The implementation of an effective minimum wage by Government ultimately means that:
Some unskilled workers have a difficult time finding a job, but workers will receive higher wages giving them more purchasing power.
Employers must encourage workers to apply for positions as the positions will become more competitive.
Employers will have difficulty finding enough workers for their positions.
Employees are generally guaranteed employment with a minimum wage implemented.
(Table 1: Quantity Supplied and Quantity Demanded) Look at the table Quantity Supplied and Quantity Demanded. If a price ceiling of $10 is imposed in this market:
The quantity supplied will be greater than the quantity demanded.
An equilibrium quantity will result.
The quantity demanded will be greater than the quantity supplied.
Excess supply equal to 20 units will result.
(Table2: The Market for flavoured water) Look at the table The Market for flavorerd water. If the government imposes a price floor of $3 per bottle of flavoured water, there will be:
Equilibrium in the market for flavoured water.
A shortage of two bottles
A shortage of three bottles
A surplus of three bottles.
Market equilibrium refers to a situation in which market price
Is high enough to allow firms to earn a fair profit.
Is low enough for consumers to buy all that they want.
Is at a level where there is neither a shortage nor a surplus.
Is just above the intersection of the market supply and demand curves
The market supply curve shows
The effect on market demand of a change in the supply of a good or service.
The quantity of a good that firms would offer for sale at different prices.
The quantity of a good that consumers would be willing to buy at different prices.
Government control in a free market using price controls and quotas.
From the Demand Function P= 10 - 2.5Q. Calculate the Price of a Good if the quantity demanded was 2.
$5
$9.5
$10
$1
Figure 1: Price Controls) Look at the graph Price Controls. The consumer surplus lost as a result of the imposition of a price floor at $b is equal to the area:
abe
acg
bcge
bcke.
(Figure: Market X) Look at the figure Market X. If a price floor of $15 is imposed on this market and the government chooses to purchase the surplus, the government must buy _____ units of the good and spend a total amount of _____ on its purchase.
10; $75
10; $150
6; $135
9; $81
The supply and demand functions for sweet potatoes is written in the following mathematical form:
Demand: P = 20 – Q
Supply: P= 4 + Q
Calculate the equilibrium quantity and equilibrium price the potatoes must be traded at.
6 units at a price of $4
8 units at a price of $12
12 units at a price of $8
4 units at a price of $6
