Question :
41) Suppose a price floor sparkling wine proposed by the : 1245085
41) Suppose a price floor on sparkling wine is proposed by the Health Minister of the country of Vinyardia. What will be the likely effect on the market for sparkling wine in Vinyardia?
A) Consumer surplus will increase.
B) Producer surplus will increase.
C) Deadweight loss will increase.
D) Market efficiency will increase.
42) Which of the following is not a result of government price controls?
A) Some people win and some people lose.
B) Price controls benefit poor consumers but harm producers and wealthy consumers.
C) Price controls decrease economic efficiency.
D) A deadweight loss will occur.
43) Economists are reluctant to state that price controls are desirable or undesirable because
A) it is impossible to evaluate the impact on quantity demanded and quantity supplied as a result of price controls.
B) whether the gains from the winners exceed the losses from the losers is not strictly an economic question.
C) sometimes price controls result in increases in economic efficiency and sometimes they result in decreases in economic efficiency.
D) economists are reluctant to conduct positive analysis of price controls.
Article Summary
In an attempt to discourage smoking, New York City Mayor Michael Bloomberg proposed a bill which would set a $10.50 minimum price for a pack of cigarettes. The bill would also prohibit retailers from offering any discounts such as 2-for-1 offers or accepting discount coupons. New York City already has the highest cigarette tax in the country, at $5.85 per pack, and the state of New York is one of many which already require cigarettes be marked up by a specified percentage. This bill is a companion to one which would require stores to keep tobacco products hidden from sight. Although the bills are expected to be challenged in court, a precedent has been set in Rhode Island, where a court upheld a ruling allowing the city of Providence to forbid retailers from accepting coupons and offering discounts on cigarettes.
44) Refer to the Article Summary. The minimum price of $10.50 per pack of cigarettes being proposed by Mayor Bloomberg is an example of
A) a price ceiling.
B) a price floor.
C) an economically efficient price.
D) a black market price.
45) Refer to the Article Summary. The minimum price of $10.50 per pack of cigarettes being proposed by mayor Bloomberg would have which of the following effects on the market for cigarettes?
A) Consumer surplus will increase.
B) Producer surplus will increase.
C) Deadweight loss will increase.
D) Market efficiency will increase.
46) Companies in the sharing economy have the potential to lower the equilibrium price in their market, and by doing so increase efficiency. This would have a tendency to
A) increase producer surplus and increase deadweight loss.
B) increase consumer surplus and decrease deadweight loss.
C) decrease consumer surplus and decrease producer surplus.
D) maximize consumer surplus and minimize producer surplus.
47) When ________ in a market, the total net benefit to society is maximized.
A) deadweight loss is maximized
B) a competitive equilibrium is achieved
C) consumer surplus is minimized
D) producer surplus is minimized
Table 4-8
Hourly Wage
(dollars)
Quantity of Labor Supplied
Quantity of Labor Demanded
$8.00
350,000
390,000
8.50
360,000
380,000
9.00
370,000
370,000
9.50
380,000
360,000
10.00
390,000
350,000
10.50
400,000
340,000
Table 4-8 shows the demand and supply schedules for the low-skilled labor market in the city of Westover.
48) Refer to Table 4-8. What is the equilibrium hourly wage (W*) and the equilibrium quantity of labor (Q*)?
A) W* = $9.00; Q* = 370,000
B) W* = $8.50; Q* = 380,000
C) W* = $8.50; Q* = 360,000
D) W* = $9.00; Q* = 740,000
49) Refer to Table 4-8. If a minimum wage of $9.50 an hour is mandated, what is the quantity of labor demanded?
A) 380,000
B) 370,000
C) 360,000
D) 10,000
50) Refer to Table 4-8. If a minimum wage of $9.50 an hour is mandated, what is the quantity of labor supplied?
A) 390,000
B) 380,000
C) 370,000
D) 340,000
