Sample/practice exam chapter 5 2017, questions and answers PDF

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Questions in mid terms At MUN, for Economics 1010 are directly picked up from here and put in the paper. Atleast that is what I noticed....

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Economics - Canadian Edition, 15e (Ragan) Chapter 5 Price Controls and Market Efficiency 5.1 Government-Controlled Prices 1 )Atanydi s e qui l i br i um pr i c e ,whet he rgover nme ntc ont r ol l e dorno t ,t hequa nt i t ya c t ua l l yex c hange di s de t er mi ne db y A)t hee l a s t i c i t yofs uppl y. B)t hee l a s t i c i t yofde mand. C)go ve r nme ntde c r ee . D)t hel es s erofquant i t ydemandedandqua nt i t ys uppl i ed. E)t hegr e at e rofqua nt i t ydemande da ndquant i t ys uppl i ed. Ans wer :D Di ff: 1 Topi c :5 . 1 a .pr i c ec ont r ol s Ski l l :Re c al l Le ar ni ngObj . :52Compa r et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qua l i t a t i ve

2 )Cons i de rac ompe t i t i vel a bourma r ket .Thel i ke l yc ons equenc eofabi ndi ngmi ni mum wa gei nt hi s l a bourma r ke ti s A)al abours hor t a ge . B)al owe rwagef ora l li ndi vi dua l s . C)ahi ghe rwagef oral li ndi vi dua l s . D)e xc es sde ma ndf o rwor ke r s . E)unempl o yme nt . Ans we r :E Di ff: 1 Topi c :5. 1 a .pr i c ec ont r ol s Ski l l :Appl i e d Le ar ni ngObj . :52Compa r et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qua l i t a t i ve

3 )Gover nme ntpr i c ec ont r ol sar epol i c i est ha tat t e mptt omai nt ai nt he A)qua nt i t yboughta tl e s st hant hequa nt i t ys ol d. B)qua nt i t ys ol datl e s st ha nt hequant i t ybought . C)t hepr i c ea ts omedi s equi l i br i um va l ue . D)mar ke tpr i c ea te qui l i br i um. E)pr i c er e ques t edbyt hes e l l e r . Ans we r :C Di ff: 1 Topi c :5. 1 a .pr i c ec ont r ol s Ski l l :Re c al l Le ar ni ngObj . :52Compa r et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qua l i t a t i ve

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4 )I namar ketwher eweobs er veadi s e qui l i br i um,quant i t yex c ha nge di sdet er mi ned A)byt hequa nt i t ydemanded. B)byt hegr e a t e rofqua nt i t ydemande da ndquant i t ys uppl i ed. C)byne i t herquant i t ydemandednorquant i t ys uppl i ed. D)byt hel e s s e rofqua nt i t ydemande da ndquant i t ys uppl i ed. E)byt hequa nt i t ys uppl i ed. Ans we r :D Di ff: 1 Topi c :5. 1 a .pr i c ec ont r ol s Ski l l :Re c al l Le ar ni ngObj . :52Compa r et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qua l i t a t i ve

5 )Whi c hoft hef ol l owi ngs t a t e ment sa boutgover nmentpr i c ec ont r ol si smos tac c ur a t e . They A)ac tasagui de l i net opr oduc er sa st owha ti saf a i rpr i c e . B)i nf or mc ons umer swha ti st hema xi mum pr i c et he ys houl dpay . C)us ua l l ys e tupperorl owe rl i mi t sonpr i c es . D)ens ur et ha tt heac t ualpr i c ei sa ti t sf r e e ma r ketequi l i br i um. E)ens ur et hatt r a ns ac t i onst akepl ac ea taf a i rpr i c e . Ans we r :C Di ff: 1 Topi c :5. 1 a .pr i c ec ont r ol s Ski l l :Re c al l Le ar ni ngObj . :52Compa r et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qua l i t a t i ve

6 )Thepr i c eofagoodoras er vi c ec a nbede t e r mi ne dbyf r e ei nt er ac t i onofdemandands uppl yorbya go ve r nmentpr i c er e gul a t i on. Onei mpor t antdi ffe r e nc ebe t we ent hes et wopr i c e det er mi ni ngmet hodsi s A)t her ear enos hor t ag esors ur pl us esa tt hef r ee mar ke tequi l i br i um pr i c e . B)r e gul a t edpr i c e sa r ef a i r ers i nc emor epeopl ec ant henaffor dt hegoodsors er vi c es . C)t ha tar e gul at e dpr i c eabovet heequi l i br i um pr i c ewi l lal wa ysr e s ul ti ns hor t ag es . D)t hegover nmenti si nt hebe s tpos i t i ont oknow t henee dsoft hepe opl e . E)onei sc api t al i s tandt heo t he ri sc ommuni s t . Ans we r :A Di ff: 1 Topi c :5. 1 a .pr i c ec ont r ol s Ski l l :Appl i e d Le ar ni ngObj . :52Compa r et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qua l i t a t i ve

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7 )Cons i de ramar keti nwhi c ht her ei sagover nme nt s etpr i c e .I ft her ei se x c e s sdemanda tt hi spr i c e , A)t hemar keti si ni t sf r e e mar ketequi l i br i um. B)t hemar keti si ndi s equi l i br i um. C)t he r ear euns uc c es s f uls e l l e r s . D)t hepr oduc tha snotr ea c hedt hepoi ntofs at ur at i on. E)noneoft hepr oduc twi l lbee x c hanged. Ans we r :B Di ff: 1 Topi c :5. 1 a .pr i c ec ont r ol s Ski l l :Appl i e d Le ar ni ngObj . :52Compa r et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qua l i t a t i ve

8 )I nc ompe t i t i vemar ket s ,pr i c efloor sandpr i c ec ei l i ngsus ua l l yl ea dt o A)s hor t a ge s . B)ar educ t i oni nqua nt i t i e se x c hange d. C)s ur pl us es . D)pr oduc t i onc ont r olbyt hegover nme nt . E)mor ee qui t abl edi s t r i but i onsofc ommodi t i e s . Ans we r :B Di ff: 1 Topi c :5. 1 a .pr i c ec ont r ol s Ski l l :Appl i e d Le ar ni ngObj . :52Compa r et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qua l i t a t i ve

9 )I nf r eea ndc ompet i t i vema r ket s , s hor t ag esar ee l i mi na t edby A)gover nme ntpr i c ec ont r ol s . B)r a t i oni ng. C)bl ac kma r ket s . D)pr i c ei nc r e as es . E)pr i c edec r eas es . Ans we r :D Di ff: 1 Topi c :5. 1 a .pr i c ec ont r ol s Ski l l :Appl i e d Le ar ni ngObj . :52Compa r et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qua l i t a t i ve

1 0)I nf r eeandc ompe t i t i vemar ke t s ,s ur pl us e sa r ee l i mi na t edby A)gover nme ntpr i c ec ont r ol s . B)gover nme ntpur c ha s es . C)bl ac kma r ket s . D)pr i c ei nc r e as es . E)pr i c edec r eas es . Ans we r :E Di ff: 1 Topi c :5. 1 a .pr i c ec ont r ol s Ski l l :Appl i e d Le ar ni ngObj . :52Compa r et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qua l i t a t i ve

1 1)Suppos et hegove r nme nts e t sapar t i c ul arpr i c ei nt hemar ketf orgol d,whi c hr e s ul t si na ne xc e s s s uppl y .I nt hi ss i t uat i on, A)t hemar keti si ne qui l i br i um. B)t hemar keti si ndi s equi l i br i um. C)t he r ear euns uc c es s f ulbuyer s .

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D)t hegol dmar kethasnotr e a c hedt hepoi ntofs a t ur a t i on. E)nogol dwi l lbee x c ha nged. Ans we r :B Di ff: 1 Topi c :5. 1 a .pr i c ec ont r ol s Ski l l :Appl i e d Le ar ni ngObj . :52Compa r et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qua l i t a t i ve

1 2)Ami ni mum pe r mi s s i bl epr i c ee s t abl i s hedbyt hegover nme nti sc al l e d A)t hee qui l i br i um pr i c e . B)t hemar gi npr i c e . C)apr i c ec ei l i ng. D)apr i c efloor . E)t hef ai rpr i c e . Ans we r :D Di ff: 1 Topi c :5. 1 b.pr i c efloor sandc e i l i ngs Ski l l :Re c al l Le ar ni ngObj . :52Compa r et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qua l i t a t i ve

1 3)I ft heg ove r nme ntfixest hepr i c eofgoodXa bovei t sf r ee mar ke tequi l i br i um l e ve l ,wes houl de xpec t A)as ur pl usofgoodXt ooc c ur . B)as hor t a geofgoodXt ooc c ur . C)a nex c es sdemandf orgoodX. D)abl ac kma r ke tt oar i s ef orgoodX. E)anew f r e e mar k ete qui l i br i um pr i c et obee s t a bl i s he d. Ans we r :A Di ff: 1 Topi c :5. 1 b.pr i c efloor sandc e i l i ngs Ski l l :Appl i e d Le ar ni ngObj . :52Compa r et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qual i t a t i ve

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1 4)Al e ga l l yi mpos e dupperl i mi tonapr i c ei sc al l e d A)apr i c efloor . B)apr i c es uppor t . C)a nex c i s epr i c e . D)apr i c ec ei l i ng. E)agover nmentpr i c e . Ans we r :D Di ff: 1 Topi c :5 . 1 b.pr i c efloor sandc e i l i ngs Ski l l :Re c al l Le ar ni ngObj . :52Compar et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qual i t a t i ve

1 5)Abi ndi ngpr i c efloori sa A)mi ni mum pr i c e , bel ow e qui l i br i um,be l ow whi c hpr i c ei snotal l o we dt of al l . B)maxi mum pr i c e ,a bovee qui l i br i um,whi c hpr i c ei snotal l owedt oex c e e d. C)mi ni mum pr i c e ,abovee qui l i br i um,bel ow whi c hpr i c ei snotal l o wedt of al l . D)maxi mum pr i c e , bel ow e qui l i br i um,whi c hpr i c ei snota l l owe dt oex c eed. E)anymi ni mum pr i c ebel ow whi c hpr i c ei snota l l owe dt of al l . Ans we r :C Di ff: 2 Topi c :5 . 1 b.pr i c efloor sandc e i l i ngs Ski l l :Re c al l Le ar ni ngObj . :52Compar et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qual i t a t i ve

1 6)Al e ga lpr i c efloori sa A)pr i c es e tbyt hegover nme nta twhi c hal lgoodsors er vi c esmus tbel e ga l l ys ol d. B)maxi mum pr i c eabovewhi c hs al esc a nnotl e ga l l ybemade . C)mi ni mum pr i c ebel ow whi c hs al esc annotl ega l l ybemade . D)pr i c eabovewhi c ht he r ewoul dbenodemand. E)pr i c ebe l ow whi c ht he r ewoul dbenos uppl y . Ans we r :C Di ff: 1 Topi c :5 . 1 b.pr i c efloor sandc e i l i ngs Ski l l :Re c al l Le ar ni ngObj . :52Compar et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qual i t a t i ve

1 7)I nwhi c ht ypeofmar ke twoul dagover nmentbemos tl i ke l yt oes t abl i s ha" l e gal "pr i c efloor ? A)hous i ngma r ket B)l abourmar ke t C)di amondma r k et D)e l ec t r i c i t yma r k et E)nat ur algasma r ket Ans we r :B Di ff: 2 Topi c :5 . 1 b.pr i c efloor sandc e i l i ngs Ski l l :Appl i e d Le ar ni ngObj . :52Compar et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qual i t a t i ve

1 8)Forapr i c efloort obebi ndi ng,i tmus tbes et A)ve r yl ow. B)a tt hef r e e ma r ketequi l i br i um pr i c e . C)be l ow t hef r e emar ketequi l i br i um pr i c e . D)a tal e vel s uc ht ha tt her eex i s t ss omeuns a t i s fieddema nd.

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E)abovet hef r e ema r kete qui l i br i um pr i c e . Ans we r :E Di ff: 1 Topi c :5 . 1 b.pr i c efloor sandc e i l i ngs Ski l l :Re c al l Le ar ni ngObj . :52Compar et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qual i t a t i ve

1 9)Cons i dert hemar ke tf orpul pandpa per .S uppos e ,i nanat t e mptt ohel pt hi si ndus t r y ,t heg ove r nme nt s e t sapr i c efloora bovet hef r eema r ke te qui l i br i um pr i c e .Ther e s ul twi l lbe A)ac ont i nuat i onoft hemar ket det e r mi ne de qui l i br i um pr i c eandqua nt i t y . B)t hequa nt i t ydema nde dwi l le x c ee dqua nt i t ys uppl i edandt he r ewi l lbeas hor t a gei nt hemar ke t . C)t hequant i t ys uppl i edwi l le xc ee dqua nt i t ydemande da ndt her ewi l lbeas ur pl usi nt hema r ke t . D)anew f r ee ma r ke te qui l i br i um a tahi ghe rpr i c eandl owe rout putl e vel . E)i nc r e as edgo ve r nmentr e venue . Ans we r :C Di ff: 2 Topi c :5 . 1 b.pr i c efloor sandc e i l i ngs Ski l l :Appl i e d Le ar ni ngObj . :52Compar et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qual i t a t i ve

2 0)Cons i dert hemar ke tf ori r onor e ,a ni mpor t anti ndus t r i ali nput . Suppos et hegover nme nts e t sapr i c e floorbel o wt hef r e emar ketequi l i br i um pr i c e .Ther e s ul twi l lbe A)ac ont i nuat i onoft hef r e e ma r ke te qui l i br i um pr i c ea ndquant i t y. B)t hequa nt i t ydema nde dwi l le x c ee dqua nt i t ys uppl i edandt he r ewi l lbeas hor t a gei nt hemar ke t . C)t hequant i t ys uppl i edwi l le xc ee dqua nt i t ydemande da ndt her ewi l lbeas ur pl usi nt hema r ke t . D)anew f r ee ma r ke te qui l i br i um a tal owe rpr i c eandhi ghe rout putl e ve l . E)i nc r e as edgo ve r nmentr e venue . Ans we r :A Di ff: 2 Topi c :5 . 1 b.pr i c efloor sandc e i l i ngs Ski l l :Appl i e d Le ar ni ngObj . :52Compar et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qual i t a t i ve

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2 1)Ane xc e s ss uppl yofs omepr oduc ti st hes a met hi ngas A)as ur pl us . B)anex c es sdema nd. C)as hor t a ge . D)s c ar c i t y. E)pr i c efloor . Ans we r :A Di ff: 1 Topi c :5 . 1 b.pr i c efloor sandc e i l i ngs Ski l l :Re c al l Le ar ni ngObj . :52Compar et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qual i t a t i ve

2 2)Ane xc e s sdemandf ors omepr oduc ti st hes amet hi ngas A)as ur pl us . B)anex c es ss uppl y . C)as hor t a ge . D)bl ac kma r ke t . E)pr i c ec ei l i ng. Ans we r :C Di ff: 1 Topi c :5 . 1 b.pr i c efloor sandc e i l i ngs Ski l l :Re c al l Le ar ni ngObj . :52Compar et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qual i t a t i ve

2 3)Suppos et hegove r nme nte s t a bl i s he sabi ndi ngpr i c efloorf ors omepr oduc t .Att hepr i c efloor , A)al t houghs el l e r sar es el l i nga l loft hepr oduc tt ha tt he yde s i r e ,c ons ume r sar enota bl et obuya l lt ha t t he ydes i r e . B)anew f r e e mar k ete qui l i br i um pr i c ea ndquant i t ywi l lbee s t a bl i s he d. C)bot hs e l l er sandbuyer sar es a t i s fiedwi t ht hequa nt i t yt hati sbei nge x c hange d. D)bot hs el l e r sa ndbuye r sar ee xc hangi ngt hef r e e ma r ketequi l i br i um quant i t y. E)al t houghc ons ume r sar epur c has i ngal loft hepr oduc tt he ydes i r ea tt hi spr i c e ,t hes e l l e r sar enots e l l i ng a l lt he ydes i r e . Ans we r :E Di ff: 2 Topi c :5 . 1 b.pr i c efloor sandc e i l i ngs Ski l l :Re c al l Le ar ni ngObj . :52Compar et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qual i t a t i ve

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2 4)Suppos et hegove r nme ntde c i de st oe l i mi na t eabi ndi ngpr i c efloort hati tha dpr evi ous l yi mpos e dona pa r t i c ul a rg ood. I tc a nbee xpe c t e dt ha t A)t hepr i c ewoul di nc r ea s e , t hequant i t ydema nde dwoul dde c r e as eandt hequant i t ys uppl i e dwoul d i nc r eas e . B)t hepr i c ewoul di nc r ea s e ,t hequant i t yde mandedwoul di nc r e as eandt hequant i t ys uppl i e dwoul d de c r e as e . C)t hepr i c ewoul dde c r e as e ,t hequant i t ydema nde dwoul dde c r e as eandt hequant i t ys uppl i e dwoul d i nc r eas e . D)t hepr i c ewoul ddec r ea s e ,t hequant i t ydemandedwoul di nc r e as eandt hequant i t ys uppl i e dwoul d de c r e as e . E)noc hangeswoul dt akepl ac e . Ans we r :D Di ff: 2 Topi c :5 . 1 b.pr i c efloor sandc e i l i ngs Ski l l :Appl i e d Le ar ni ngObj . :52Compar et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qual i t a t i ve

2 5)Suppos et hegove r nme ntde c i de st oe l i mi na t eabi ndi ngpr i c ec ei l i ngt ha ti thadpr evi ous l yi mpos ed onapar t i c ul a rgood. I tc anbee x pec t e dt ha t A)t hepr i c ewoul di nc r ea s e , qua nt i t ydemande dwoul ddec r ea s e ,andqua nt i t ys uppl i edwoul ddec r eas e . B)t hepr i c ewoul di nc r ea s e ,quant i t yde mande dwoul ddec r ea s e ,a ndquant i t ys uppl i e dwoul di nc r e as e . C)t hepr i c ewoul dde c r e as e ,quant i t ydema ndedwoul dde c r e as e , andqua nt i t ys uppl i edwoul di nc r e a s e . D)t hepr i c ewoul ddec r ea s e ,qua nt i t ydemandedwoul di nc r e as e , andqua nt i t ys uppl i edwoul ddec r e a s e . E)noc hangewoul dt a kepl a c e Ans we r :B Di ff: 2 Topi c :5 . 1 b.pr i c efloor sandc e i l i ngs Ski l l :Appl i e d Us e r 2 :Qual i t a t i ve

2 6)Abi ndi ngmi ni mum wa gee s t a bl i s he db yt hegover nment A)i ses s ent i al l yapr i c ec ei l i ngt ha tc r e at e sas hor t ageofwor ke r s . B)wi l lbee ffec t i veonl yi ft hemi ni mum wag ei ss e tbe l ow t hef r e e ma r ke tequi l i br i um wa ge . C)wi l lha venoe ffec tont hequa nt i t yofl aboure mpl oyed. D)wi l la ffe c ta dve r s el yonl yt hos ewor ker swhos ev a l ueofpr oduc t i vi t yi sgr e a t ert ha nt hi smi ni mum wa ge . E)i sapr i c efloort hatwi l lc r ea t eas ur pl usofwor k er si ft hel a bourma r keti sc ompe t i t i ve . Ans we r :E Di ff: 2 Topi c :5 . 1 b.pr i c efloor sandc e i l i ngs Ski l l :Appl i e d Le ar ni ngObj . :52Compar et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qual i t a t i ve

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2 7)I ft hee qui l i br i um wagei nac ompet i t i vel abourmar keti s$ 9pe rhour ,a ndt hegover nme ntr ai s e st he mi ni mum wa gef r om $ 7t o$ 8perhour ,wha twi l lbet hee ffec ti nt hi smar ket ? A)t hel e vel ofe mpl oyme ntwi l ldec r ea s e B)unempl o yme ntwi l li nc r ea s e C)unempl oyme ntwi l ldec r e as e D)t her ewi l lbenoeffec tone mpl oyme nt E)t hea ve r agewag epa i dt owor k er swi l li nc r e as e Ans we r :D Di ff: 2 Topi c :5 . 1 b.pr i c efloor sandc e i l i ngs Ski l l :Appl i e d Le ar ni ngObj . :52Compar et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qual i t a t i ve

2 8)Foral egi s l at e dmi ni mum waget obebi ndi ngi nac ompet i t i vel a bourma r ke t ,i tmus tbes e t A)be l ow t hef r e e ma r k etwage . B)e qua lt ot hef r e emar ke twa ge . C)a bo vet hef r e emar ketwag e . D)a torbe l ow t hef r e e ma r ketwage . E)s uc ht ha tnowor ke rc anea r nmor et hant hee s t a bl i s he dmi ni mum wage . Ans we r :C Di ff: 1 Topi c :5 . 1 b.pr i c efloor sandc e i l i ngs Ski l l :Re c al l Le ar ni ngObj . :52Compar et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qual i t a t i ve

2 9)Al e ga lpr i c ec ei l i ng,i fi ti sbi ndi ng,i sa A)mi ni mum pr i c e , bel ow e qui l i br i um,whi c hpr i c ei snota l l owe dt of al lbel ow. B)maxi mum pr i c e ,a bovee qui l i br i um,whi c hpr i c ei snotal l owedt oex c e e d. C)mi ni mum pr i c e ,abovee qui l i br i um,whi c hpr i c ei snotal l owe dt of a l lbe l ow. D)maxi mum pr i c e , bel ow e qui l i br i um,whi c hapr i c ei snota l l owe dt oex c ee d. E)anyma xi mum pr i c ewhi c hpr i c ei snotal l owe dt oe x c e ed. Ans we r :D Di ff: 1 Topi c :5 . 1 b.pr i c efloor sandc e i l i ngs Ski l l :Re c al l Le ar ni ngObj . :52Compar et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qual i t a t i ve

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3 0)Apr i c ec e i l i ngs etbe l ow t hef r e e mar ketequi l i br i um pr i c ewi l lr e s ul ti n A)ac l e a r i ngoft hema r ket . B)gr e a t erquant i t yex c ha nged. C)s ur pl us e s . D)e xc es sde ma nd. E)e xc es ss uppl y . Ans we r :D Di ff: 1 Topi c :5 . 1 b.pr i c efloor sandc e i l i ngs Ski l l :Re c al l Le ar ni ngObj . :52Compar et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qual i t a t i ve

3 1)Suppos et hef r e ema r k ete qui l i br i um pr i c ef ori c et i mea tpr i va t el yoper a t edhoc ke yar ena si s$25 0per hour .I ft hemuni c i pa lg over nme nti mpos esapr i c ec ei l i ngof$1 30pe rhour ,wec a nex pec tt os e e A)anadj us t me ntoft hef r e emar ke te qui l i br i um pr i c et o$ 100 . B)anex c es ss uppl yofi c et i me . C)abl a c kmar ketpr i c ebe l ow t hef r ee mar kete qui l i br i um pr i c e . D)t hatnei t he re xc es ss uppl ynorex c e s sde mandi sc r e at ed. E)anex c es sdema ndf ori c et i me . Ans we r :E Di ff: 2 Topi c :5 . 1 b.pr i c efloor sandc e i l i ngs Ski l l :Appl i e d Le ar ni ngObj . :52Compar et hes hor t r una ndl ongr une ffe c t sofl e gi s l a t e dr e ntc ont r ol s . Us e r 2 :Qual i t a t i ve

3 2)I nac ompet i t i vema r ke t ,al e galpr i c ec ei l i ngs etabovet hef r e emar ke te qui l i br i um pr i c ewi l lr e s ul ti n A)ac ont i nuat i ...