Test bank For Macroeconomics 14th Canadian Edition By MCCONNELL ET AL

Test bank For Macroeconomics 14th Canadian Edition By MCCONNELL ET AL

Chapter 5 Price Controls and Market Efficiency

5.1 Government-Controlled Prices

1) At any disequilibrium price, whether government controlled or not, the quantity actually exchanged is determined by

A) the elasticity of supply.

B) the elasticity of demand.

C) government decree.

D) the lesser of quantity demanded and quantity supplied.

E) the greater of quantity demanded and quantity supplied.

Answer: D

Diff: 1

Topic: 5.1a. price controls

Skill: Recall

Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.

User2: Qualitative

2) Consider a competitive labour market. The likely consequence of a binding minimum wage in this labour market is

A) a labour shortage.

B) a lower wage for all individuals.

C) a higher wage for all individuals.

D) excess demand for workers.

E) unemployment.

Answer: E

Diff: 1

Topic: 5.1a. price controls

Skill: Applied

Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.

User2: Qualitative

3) Government price controls are policies that attempt to maintain the

A) quantity bought at less than the quantity sold.

B) quantity sold at less than the quantity bought.

C) the price at some disequilibrium value.

D) market price at equilibrium.

E) price requested by the seller.

Answer: C

Diff: 1

Topic: 5.1a. price controls

Skill: Recall

Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.

User2: Qualitative

4) In a market where we observe a disequilibrium, quantity exchanged is determined

A) by the quantity demanded.

B) by the greater of quantity demanded and quantity supplied.

C) by neither quantity demanded nor quantity supplied.

D) by the lesser of quantity demanded and quantity supplied.

E) by the quantity supplied.

Answer: D

Diff: 1

Topic: 5.1a. price controls

Skill: Recall

Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.

User2: Qualitative

5) Which of the following statements about government price controls is most accurate. They

A) act as a guideline to producers as to what is a fair price.

B) inform consumers what is the maximum price they should pay.

C) usually set upper or lower limits on prices.

D) ensure that the actual price is at its free-market equilibrium.

E) ensure that transactions take place at a fair price.

Answer: C

Diff: 1

Topic: 5.1a. price controls

Skill: Recall

Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.

User2: Qualitative