Which of the following statements is true? O A. The imposition of a price support above the free market equilibrium price will increase the producer surplus. O B. The imposition of a minimum price above the free market equilibrium price will increase the consumer surplus. O C. The imposition of a production quota below the free market equilibrium quantity will increase the market welfare. O D. The imposition of a maximum price will always create a shortage of supply.

When a tax is levied on a good, what happens to the market price and why? Select one: O a The market price rises because both quantity demanded and quantity cross out supplied falls. O b. The market price falls because quantity supplied falls. cross out O. The market price falls because quantity demanded falls. cross out O d. The market price rises because both quantity demanded and quantity cross out supplied rises.

he market equilibrium price for lettuce is $2 per pound.  The market equilibrium quantity for lettuce is 30,000 pounds of lettuce.  The government decideds to impose a price floor of $3 per pound of lettuce.  After the price floor is imposed, the quantity of lettuce supplied will be _____ 30,000 pounds and the quantity of lettuce demanded will be ______ 30,000.  The price floor causes a ____ in the market for lettuce. greater than less than surplus equal to shortage

O The demand curve for a product is given by Qp = 400-20P and the supply curve for a product is given by Qs = 16P-32. O a. Illustrate the demand curve and the supply curve on the same graph. O b. Find the equilibrium price and quantity. O c. Find numerical values for the consumer surplus and the producer surplus. O d. Identify consumer surplus and producer surplus on your graph.

10 If the supply curve shifts right and the demand curve remains unchanged price increases; quantity increases price decreases; quantity increases price increases; quantity increases, decreases or is unchanged price increases; quantity decreases

If a price floor is not binding, then O a. there will be a shortage in the market. O b. there will be no effect on the market price or quantity sold. O c. there will be a surplus in the market. d. the market will be less efficient than it would be without the price floor.

A low-income country decides to set a price ceilingon bread so it can make sure that bread is affordable tothe poor.Table 3.11 provides the conditions of demandand supply. What are the equilibrium price andequilibrium quantity before the price ceiling? What willthe excess demand or the shortage (that is, quantitydemanded minus quantity supplied) be if the priceceiling is set at $2.40? At $2.00? At $3.60?