If the government sets a minimum price above the equilibrium price for soybeans, which of the following statements will be correct?
A. There will be an efficient level of output produced.
B. There will be excess supply.
C. There will be excess demand.
D. all of the above
Which of the following would result from a quota imposed on the quantity of cars that can be imported into the United States?
A. an increase in the total surplus
B. an increase in producer surplus
C. an increase in prices for consumers
D. an increase in consumer surplus
A ban on imported avocados would result in __________ .
A. an increase in total surplus because domestic production will increase
B. no change in total surplus because the reduction in consumer surplus will offset the increase in producer surplus
C. a reduction in total surplus because a deadweight loss is created
D. It is impossible to say what will happen to total surplus.
Assume that the supply of smartphones remains constant, but the price of smartphones increases. Producer surplus __________ .
A. will decrease
B. will increase
C. will remain constant
D. may increase or decrease depending on the amount of the price increase
Assume that Crystal's demand for handbags remains constant, but the price of handbags increases. Crystal's consumer surplus __________ .
A. decreases
B. increases
C. remains constant
D. may increase or decrease depending on the amount of the price decrease
Taxes may cause deadweight losses because __________ .
A. they transfer purchasing power from buyers to the government
B. they lower the surplus in the market
C. they increase consumer surplus at the expense of producer surplus
D. they transfer purchasing power from sellers to the government
A ban on imported avocados would result in __________ .
A. an increase in total surplus because domestic production will increase
B. no change in total surplus because the reduction in consumer surplus will offset the increase in producer surplus
C. a reduction in total surplus because a deadweight loss is created
D. It is impossible to say what will happen to total surplus.
If the government sets a minimum price above the equilibrium price for soybeans, which of the following statements will be correct?
A. There will be an efficient level of output produced.
B. There will be excess supply.
C. There will be excess demand.
D. all of the above
If the government sets a maximum price for insulin below the equilibrium price, __________ .
A. there will be an efficient level of insulin produced
B. there will be excess supply of insulin
C. total surplus will be lower than it would be at the market equilibrium price
D. total surplus will be greater than it would be at the market equilibrium price
Recall the application about price controls and the candy bars. During World War II, the U.S. government imposed price controls to set maximum prices on all different products, including candy bars. How did the candy bar producers respond to maximum prices?
A. Producers increased the supply of candy bars.
B. Producers shrank the weight of the candy bars.
C. A lot of the producers dropped out of candy bar market.
D. none of the above