ANS: a. b. Equilibrium price would be $4 and equilibrium quantity would be 8,000. c. A surplus of 4,000 flashlights would be the problem in the economy and we would expect the price to fall. d. A shortage of 8,000 flashlights would be the problem in the economy and we would expect the price to rise 20) What area represents consumer surplus after the imposition of the Refer to Figure 4-6. price floor? A) + + A B E B) + A B C) + + + A B E F D) A Answer: D 21) What is the area that represents producer surplus after the imposition Refer to Figure 4-6. of the price floor? A) + + A B E B) + B E C) + + B E F D) + + + B C D E Answer: B 22) What area represents the portion of consumer surplus that has been Refer to Figure 4-6. transferred to producer surplus as a result of the price floor? A) B B) + B C C) + B E D) E Answer: A 23) What area represents the deadweight loss after the imposition of the Refer to Figure 4-6. price floor? A) + + C D G B) + F G C) + C D D) + + + C D F G Answer: C a supply-demand diagram, show a labor market with a binding minimum wage. Now, use the diagram to show those who are helped by the minimum wage, and those who are hurt by the minimum wage. ANS:
ANS: a. b. Equilibrium price would be $4 and equilibrium quantity would be 8,000. c. A surplus of 4,000 flashlights would be the problem in the economy and we would expect the price to fall. d. A shortage of 8,000 flashlights would be the problem in the economy and we would expect the price to rise 20) Refer to Figure 4-6. What area represents consumer surplus after the imposition of the price floor? A) A + B + E B) A + B C) A + B + E + F D) A Answer: D 21) Refer to Figure 4-6. What is the area that represents producer surplus after the imposition of the price floor? A) A + B + E B) B + E C) B + E + F D) B + C + D + E Answer: B 22) Refer to Figure 4-6. What area represents the portion of consumer surplus that has been transferred to producer surplus as a result of the price floor? A) B B) B + C C) B + E D) E Answer: A 23) Refer to Figure 4-6. What area represents the deadweight loss after the imposition of the price floor? A) C + D + G B) F + G C) C + D D) C + D + F + G Answer: C a supply-demand diagram, show a labor market with a binding minimum wage. Now, use the diagram to show those who are helped by the minimum wage, and those who are hurt by the minimum wage. ANS:
Practice-Questions-for-the-Examination.docx