Question : 21) Refer to Figure 4-6. What the area that represents : 1267055

21) Refer to Figure 4-6. What is the area that represents producer surplus after the imposition of the price floor?

A) A + B + E

B) B + E 

C) B + E + F

D) B + C + D + E

22) Refer to Figure 4-6. What area represents the portion of consumer surplus that has been transferred to producer surplus as a result of the price floor?

A) B

B) B + C

C) B + E

D) E

23) Refer to Figure 4-6. What area represents the deadweight loss after the imposition of the price floor?

A) C + D + G

B) F + G

C) C + D

D) C + D + F + G

24) Congress passed the ________ in 1996, the purpose of which was to phase out price floors and return to a free market in agriculture

A) Rice and Beans Act

B) Smoot-Hawley Act

C) Agribusiness Act

D) Freedom to Farm Act

25) David Card and Alan Kruger conducted a study of fast-food restaurants in New Jersey and Pennsylvania.  The study found that

A) there was a large reduction in employment of low-skilled workers when the minimum wage was raised in these states.

B) the earned income tax credit is more effective in raising the incomes of low-skilled workers than increases in the minimum wage.

C) increases in the minimum wage had a very small impact on employment.

D) increases in the prices of food have a greater effect on wage increases in New Jersey than in Pennsylvania.

26) Which of the following is not a result of imposing a rent ceiling?

A) Some consumer surplus is converted to producer surplus.

B) There is a reduction in the quantity supplied of apartments.

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

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

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

A) Scarcity

B) A shortage

C) A surplus

D) An overstock

28) In cities with rent controls, the actual rents paid can be higher than the legal maximum.  One explanation for this is

A) rent control laws are so complicated that landlords and tenants may not be aware of what the legal price is.

B) landlords are allowed to charge more than the legal maximum on some apartments so long as they charge less on others.

C) because there is a shortage of apartments, tenants often are willing to pay rents higher than the law allows.

D) the legal penalty landlords face for charging more than the legal maximum rent is less than the revenue earned by charging their tenants more than the maximum rent. 

29) 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) Quantity demanded will decrease, quantity supplied will increase, and a surplus will result.

B) Quantity demanded will increase, quantity supplied will decrease, and a surplus will result.

C) Quantity demanded will decrease, quantity supplied will increase, and a shortage will result.

D) Quantity demanded will increase, quantity supplied will decrease, and a shortage will result.

30) 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.