Question : 84) Congress passed the Freedom to Farm Act in 1996. : 1387460

84) Congress passed the Freedom to Farm Act in 1996. What was the purpose of this Act?

A) to encourage more people to become farmers

B) to grant free land to farmers in order to produce crops that were particularly scarce

C) to phase out the use of price ceilings in agricultural markets

D) to phase out price floors and return to a free market in agriculture

85) Because minimum wage is a price floor,

A) it will be set below the market equilibrium price.

B) it will create a deadweight loss.

C) it will increase the number of jobs available in the labor market.

D) it will maximize consumer surplus.

86) Increases in the minimum wage are intended to raise the incomes of low-income workers. Many economists favor a different policy to achieve this goal, a policy that avoids the deadweight losses that result from the minimum wage. What is this policy?

A) distribution of food stamps to low-income consumers

B) distribution of vouchers that can be used for rent or mortgage payments

C) the Alternative Minimum Tax

D) the earned income tax credit

87) Which of the follow is a result of imposing a rent ceiling?

A) Some consumer surplus is converted to producer surplus.

B) There is an increase in the quantity of apartments supplied.

C) There is an increase in the quantity of apartments demanded.

D) The marginal benefit of the last apartment rented is less than the marginal cost of supplying it.

88) Which of the following describes the difference between “scarcity” and “shortage”?

A) There is no difference; either word can be used to describe the situation that exists when there is less of a good or service available than people want.

B) In the economic sense, almost everything is scarce. A shortage of a good or service occurs when the quantity demanded is greater than the quantity supplied at the current market price.

C) There is a shortage of almost everything. Scarcity occurs only if the quantity demanded of a good or service is greater than the quantity supplied at the current market price.

D) In the economic sense, almost everything is scarce. A shortage of a good or service occurs when the quantity demanded is greater than the quantity supplied at the equilibrium price.

89) In cities with rent controls, the actual rents paid can be ________ than the legal maximum. One explanation for this is because there is a ________ of apartments, tenants are ________.

A) higher; shortage; often willing to pay rents higher than the law allows

B) higher; surplus; often forced to pay rents higher than the law allows

C) lower; surplus; never willing to pay rents below the legal maximum

D) lower; shortage; rarely willing to pay rents lower than the law allows

90) Which of the following is 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 increase economic efficiency.

D) The deadweight loss from price ceilings is greater than the deadweight loss from price floors.

91) Economists ________ that price controls are desirable.

A) are in agreement

B) are reluctant to state

C) never believe

D) only recently agree

92) If the government implements a price ceiling on insulin, this will

A) increase the price consumers will pay for insulin.

B) decrease the quantity of insulin the manufacturers will be willing to supply.

C) have to be set above the market equilibrium price to be effective.

D) encourage manufacturers to produce and sell more of insulin to increase their profits.

93) If the government implements a price ceiling on insulin, this will have all of the following effects on the market for insulin except

A) an increase in consumer surplus.

B) an increase in producer surplus.

C) an increase in deadweight loss.

D) a more efficient equilibrium.