Price Ceilings: Lines and Search Costs Practice Questions | Marginal Revolution University

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Practice Questions

Price Ceilings: Lines and Search Costs Practice Questions

When a price ceiling is in place keeping the price below the market price, what’s larger: quantity demanded or quantity supplied? *

a. Quantity demanded.

b. Quantity supplied.

c. Indeterminate with the given information.

d. Neither.

Suppose that the market for coats is described as follows: What is the equilibrium price of coats?

*

a. $120

b. $100

c. $80

d. $60

Suppose the government sets a price ceiling of $80. How large will the shortage be? *

a. 5 million coats

b. 4 million coats

c. 3 million coats

d. There is no shortage

Suppose again that the government sets a price ceiling of $80 and that people line up to get this good. For how long will people wait in line to obtain a coat if they value their time at $10 an hour? *

a. 2 hours

b. 3 hours

c. 4 hours

d. Indeterminate from the given information.

Between 2000 and 2008, the price of oil increased from $30 per barrel to $140 per barrel, and the price of gasoline in the United States rose from about $1.50 per gallon to over $4.00 per gallon. Unlike in the 1970s when oil prices spiked, there were no long lines outside gas stations. Why? *

a. Government intervened to prevent lines.

b. Government intervened to enact gasoline rations.

c. There was no price control on gasoline at the time.

Price controls distribute resources in many unintended ways. In the following cases below, who will probably spend more time waiting in line to get scarce, price-controlled goods? Choose one from each pair: *

a. Working people

b. Retired people

Choose one from each pair: *

a. Fast-food employees who earn $8 per hour

b. Lawyers who charge $800 per hour

Choose one from each pair: *

a. People with desk jobs

b. People who can disappear for a couple of hours during the day

Which job exists in part because time-sensitive wealthy individuals want to pay someone else to wait in line for them? *

a. Fast food employees

b. Ticket scalpers

c. Construction workers

d. Truck drivers

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Principles of Economics Microeconomics

Course (105 videos)

Introduction

Introduction to Microeconomics

Practice Questions

Opportunity Cost and Tradeoffs

Practice Questions

Marginal Thinking and the Sunk Cost Fallacy

Practice Questions

Interactive Practice

Supply, Demand, and Equilibrium

The Demand Curve

Practice Questions

The Supply Curve

Practice Questions

The Equilibrium Price and Quantity

Practice Questions

Understanding the Demand Curve: Shifts and Consumer Surplus

Practice Questions

Interactive Practice

What Shifts the Demand Curve?

Practice Questions

Change in Demand vs. Change in Quantity Demanded

Interactive Practice

Understanding the Supply Curve: Shifts and Producer Surplus

Interactive Practice

What Shifts the Supply Curve?

Interactive Practice

Exploring Equilibrium

Interactive Practice

Interactive Practice

Supply and Demand Terminology

Practice Questions

Does the Equilibrium Model Work?

Practice Questions

Elasticity and Its Applications

Elasticity of Demand

Practice Questions

Calculating the Elasticity of Demand

Practice Questions

Office Hours: Elasticity of Demand

Practice Questions

Elasticity of Supply

Practice Questions

Elasticity of Supply: Why Housing is Unaffordable

Practice Questions

Elasticity of Supply: Do Gun Buybacks Work?

Practice Questions

Taxes and Subsidies

Commodity Taxes

Practice Questions

Who Pays the Tax?

Practice Questions

Tax Revenue and Deadweight Loss

Practice Questions

Practice Questions

Practice Questions

The Price System

A Price Is a Signal Wrapped up in an Incentive

Practice Questions

Markets Link the World

Practice Questions

The Great Economic Problem

Practice Questions

Information and Incentives

Practice Questions

Practice Questions

Prediction Markets

Practice Questions

Price Ceilings and Price Floors

Practice Questions

Price Ceilings: Shortages and Quality Reduction

Practice Questions

Price Ceilings: Lines and Search Costs

Practice Questions

Price Ceilings: Deadweight Loss

Practice Questions

Price Ceilings: Misallocation of Resources

Interactive Practice

Price Ceilings: Rent Controls

Practice Questions

Rent Control in Mumbai

Practice Questions

Price Floors: The Minimum Wage

Practice Questions

Price Floors: Airline Fares

Interactive Practice

Why Do Governments Enact Price Controls?

Practice Questions

Price Controls and Communism

Practice Questions

Trade

The Big Ideas of Trade

Practice Questions

Comparative Advantage

Practice Questions

Another Look at Comparative Advantage

Practice Questions

Comparative Advantage Homework

Practice Questions

Tariffs and Protectionism

Interactive Practice

Arguments Against International Trade

Practice Questions

Avengers: The Story of Globalization (Optional)

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Externalities

What Are Negative Externalities?

Practice Questions

Pigouvian Taxes

What Are Positive Externalities?

Practice Questions

Pigouvian Subsidies

Command and Control Solutions

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The Coase Theorem

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Trading Pollution

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A Deeper Look at Tradable Allowances

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Externalities and Incentives: The Economics of COVID

Practice Questions

Costs and Profit Maximization Under Competition

Introduction to the Competitive Firm

Practice Questions

Maximizing Profit Under Competition

Practice Questions

Maximizing Profit and the Average Cost Curve

Practice Questions

Entry, Exit, and Supply Curves: Increasing Costs

Practice Questions

Entry, Exit, and Supply Curves: Constant Costs

Practice Questions

Entry, Exit, and Supply Curves: Decreasing Costs

Practice Questions

Competition and the Invisible Hand

Minimization of Total Industry Costs of Production

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The Balance of Industries and Creative Destruction

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Monopoly

Maximizing Profit Under Monopoly

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Office Hours: Calculating Monopoly Profit

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The Monopoly Markup

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The Costs and Benefits of Monopoly

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Price Discrimination

Introduction to Price Discrimination

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The Social Welfare of Price Discrimination

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Practice Questions

Practice Questions

Labor Markets

The Marginal Product of Labor

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Econ Duel: Is Education Signaling or Skill Building?

Human Capital and Signaling

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The Tradeoff Between Fun and Wages

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Compensating Differentials

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Do Unions Raise Wages?

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Public Goods and the Tragedy of the Commons

Public Goods and Asteroid Defense

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A Deeper Look at Public Goods

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Practice Questions

The Tragedy of the Commons

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Asymmetric Information

Asymmetric Information and Used Cars

Practice Questions

Asymmetric Information in Health Insurance

Practice Questions

Practice Questions

Solutions to Moral Hazard

Practice Questions

Practice Questions

Consumer Choice

Introduction to Consumer Choice

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Budget Constraints

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Indifference Curves

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Consumer Optimization

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Bonus Topics

Office Hours: Game Theory

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Principles of Economics: Microeconomics

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