Question : 71) Refer to Table 5-1. Suppose the government imposed a : 1384175

71) Refer to Table 5-1. Suppose the government imposed a price of $0.60 per chocolate bar. The result would be

A) excess demand of 450 chocolate bars per week.

B) excess supply of 450 chocolate bars per week.

C) excess supply of 1750 chocolate bars per week.

D) excess demand of 2200 chocolate bars per week.

E) stockpiling of unsold chocolate bars.

72) Refer to Table 5-1. Suppose the government imposed a price of $1.80 per chocolate bar. A likely result from this policy is

A) the development of a black market in chocolate bars.

B) the allocation of chocolate bars by sellers preference.

C) the allocation of chocolate bars on a first-come, first-serve basis.

D) the stockpiling of unsold inventories of chocolate bars.

E) the rationing of chocolate bars.

73) Refer to Table 5-1. Suppose the government established a price floor of $1.00 per chocolate bar. How many thousands of chocolate bars would be exchanged per week?

A) 2000

B) 1850

C) 1900

D) 1800

E) 2100

74) Refer to Figure 5-1. If the diagram applies to the market for rental housing and P3 represents the maximum rent that can be charged, then

A) there will be an excess supply of rental units equal to BD.

B) units supplied will be reduced relative to the competitive equilibrium by AF rental units.

C) windfall profits will be earned by landlords.

D) there will be excess demand for rental units equal to FC.

E) there will be excess demand for rental units equal to AF.

75) In the presence of binding rent controls, the shortage of housing is smaller

A) the higher is the elasticity of demand for housing.

B) the lower is the elasticity of supply of housing.

C) the longer is the length of time the rent controls are in place.

D) the greater is the difference between the equilibrium price and the rent-controlled price.

E) the more elastic is the long-run supply of housing.

76) Consider the market for rental accommodation. In the short run, the supply of this product tends to be

A) infinitely price elastic.

B) very price elastic.

C) unit price elastic.

D) very or completely price inelastic.

E) irrelevant to the housing market price.

77) Which of the explanations below best describes why a government might choose to impose binding rent controls?

A) To prevent landlords from making excess profits and to protect low-income tenants from increases in the cost of housing.

B) To prevent landlords from making excess profits and to reduce the long-term quantity of rental housing.

C) To increase the demand for rental housing and to discourage private ownership of low-cost rental housing developments.

D) To stabilize volatile rents, and thus to make the investment climate less uncertain for prospective investors in this sector.

E) To stimulate employment in the construction industry through the increased demand for new houses.

78) Suppose the government establishes a ceiling on the price of rental accommodation that is lower than the free-market equilibrium price. In this case,

A) construction of new rental units will be encouraged.

B) the rental housing market will be unaffected.

C) those people who obtain rental units at the ceiling price will benefit.

D) a surplus of current rental units will develop.

E) the current stock of rental housing will be better maintained as there is a shortage of housing.

79) Assume that the long-run supply of housing is highly elastic. The imposition of binding rent controls will lead to

A) a reduction in the housing shortage over time.

B) a worsening of the housing shortage over time.

C) no significant change in the housing shortage over time.

D) only a temporary housing shortage.

E) the price of rental housing to revert back to its free-market equilibrium level.

80) The use of legislated rent controls typically

A) has no effect on the distribution of income between tenants and landlords or on the availability of rental accommodations.

B) affects the distribution of income between tenants and landlords but does not affect the supply of rental accommodations.

C) has no effect on the distribution of income between tenants and landlords but does affect the supply of rental accommodations.

D) affects the distribution of income between tenants and landlords and also affects the availability of rental accommodations.

E) has much worse effects in the short run than in the long run.