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Question
Why is it often difficult to remove a binding price floor after it exists?
a. in general, because consumers benefit from the lower prices and would lobby their elected officials to keep the price control
b. in general, because consumers benefit from higher quality products and would lobby their elected officials to keep the price control
c. in general, because consumers benefit from larger products and would lobby their elected officials to keep the price control
d. in general, because sellers benefit from higher prices and would lobby their elected officials to keep the price control
e. in general, because it has little effect on the market price and people forget about it
Answer
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Related questions
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e. completely responsive to a change in price.
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Price gouging laws will usually result in ________ the product in the distressed market.
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The economic entity most likely to engage in price gouging is
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Q:
The long-run effects of rent control support one of the five foundations of economics, namely, that
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A real-life, long-run example of a binding price ceiling isa. a minimum wage law. b. rent control. c. a price gouging law.d. a black market price.e. a ration price.
Q:
What will an individual do differently as a buyer in the black market in the long run?
a. He or she will substitute away from the product.
b. He or she will substitute toward the product.
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d. When a binding price ceiling exists, he or she will be willing to pay a lower price.
e. What he or she does as a buyer in the long run will be no different from what he or she does in the short run.
Q:
What is the long-run consequence of a price ceiling law?
a. A surplus will continue to exist and will grow larger over time.
b. A surplus will continue to exist and will grow smaller over time.
c. A shortage will continue to exist and will grow larger over time.
d. A shortage will continue to exist and will grow smaller over time.
e. The amount of the surplus will not change.
Q:
Suppose Solomon lives in a community with no price controls. What do you expect will happen if his town borders a community where there is a binding price ceiling on most products?
a. Prices in the legal market in the community with a binding price ceiling will rise.
b. Prices in the legal market in the community with a binding price ceiling will fall.
c. There will be shortages in the community with a binding price ceiling.
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Q:
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b. The binding price ceiling will discourage patients from obtaining the drugs they need.
c. The binding price ceiling will increase the likelihood that consumers will obtain needed drugs on the black market.
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Q:
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Suppose Kate lives in a community with no price controls. What could she expect will happen if her town borders a community where there is a nonbinding price ceiling on most products?
a. Legal market prices will rise in the community with a binding price ceiling.
b. Legal market prices will fall in the community with a binding price ceiling.
c. The price and the quantity sold in the community without a nonbinding price ceiling will be the same as the price and quantity in the community with a nonbinding price ceiling.
d. There will be more shortages in the community with a binding price ceiling.
e. The black market in the community with a binding price ceiling will not be strong because consumers will simply purchase the product in the community that has no price ceiling.
Q:
Why would a politician find it difficult to remove a binding price ceiling?
a. because it greatly benefits firms, and they would spend a lot of money to lobby against the laws repeal
b. because it greatly benefits government, which receives additional tax revenue as a result
c. because it greatly benefits all consumers, and they are also voters
d. because it greatly benefits some consumers who are also voters
e. because it greatly benefits society as a whole, with all consumers able to buy as much as firms produce
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b. Binding price floors encourage the formation of a black market.
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d. Binding price floors create a shortage of the product.
e. Binding price floors cause consumers to want to purchase more of the product in the legal market.
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Peanut butter and jelly are complements. If a tax is imposed on peanut butter, how will that affect the market for jelly?
a. Demand for jelly will increase along with the price.
b. Demand for jelly will decrease along with the price.
c. The supply of jelly will increase and the price will decrease.
d. Both the supply and demand for jelly will increase along with the price.
e. The supply of jelly will decrease and the price will increase.
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A tax creates no deadweight loss only when either supply or demand isa. somewhat elastic. b. perfectly elastic. c. perfectly inelastic.d. increasing.e. decreasing.
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