24 What will a binding price ceiling make it necessary to do

24. What will a binding price ceiling make it necessary to do? supply more of the product develop a way of rationing the product, because there will be a shortage develop a better marketing plan, because there will be a surplus increase demand for the product a. b. c. d. 25. In the housing market, what effect do rent controls have on quantity supplied and quantity demanded? a. causes both to fall b. causes quantity supplied to fall and quantity demanded to rise c. causes quantity supplied to rise and quantity demanded to fall d. causes both to rise Which of the following is NOT a mechanism of rationing used by landlords in cities with rent control? a. waiting lists b. race c. price d. bribes 26. 27. Whi ch of the following is the most likely explanation for the imposition of a price floor in the market for corn? Policymakers have studied the effects of the price floor carefully and recognize that the a. price floor is advantageous for society as a whole b. B uyers and sellers of corn have agreed that the price floor is good for both of them and have therefore pressured policymakers into enacting the price floor C. Buyers of corn, recognizing that the price floor is good for them, have pressured policy- makers into enacting the price floor d. Sellers of corn, recognizing that the price floor is good for them, have pressured policy- makers into enacting the price floor. 28. Why are workers with high skills and much experience not affected by the minimum wage? a. They belong to unions. b. They are not legally guaranteed the minimum wage. They generally earn wages less than the minimum wage. d. c. Their equilibrium wages are well above the minimum wage. 29. What results from a tax placed on the sellers of blueberries? a. It increases costs, lowers profit, and shifts supply to the left (upward) b. It increases costs, lowers profit, and shifts supply to the right (downward) c. It reduces costs, raises profit, and shifts supply to the left (upward) d. It reduces costs, lowers profit, and shifts supply to the right (downward) Market demand is given as QD 60-P. Market supply is given as QS would constitute a binding price floor? a. $9 b. $13 c. $15 d. $18 30. 3P. Which legally imposed price

Solution

24. b)

Binding price ceiling ( when the price ceiling is below the market price) will creat shortage. The quantity demanded will exceed quantity supplied, creating a need for rationing the scarce product.

25) b)

Quantity supplied will fall and quantity demanded will increase. This because the price ceiling on the rent will be lower than the market price.

26) c)

Price because this cannot be a rationing mechanism, whereas, the other three are.

27) d.

Price floor above market price is binding, and therefore, advantageous to sellers. Price floor is the minimum price below which the market price cannot fall.