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Price control will set up a
- price ceiling above which the market price cannot rise.
- price below the market clearing price.
- Both A and B.
- price floor below which the market price cannot fall.
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The whole concept of price gouging is based on the mis-guided idea that
- people with more urgent needs should be allowed to express them by their willingness to pay more.
- merchandise pricing should be based on opportunity cost rather than historical cost.
- people with more urgent needs should not be allowed to express them by their willingness to pay more.
- All of the above.
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Arbitrage occurs whenever prices for similar goods are divergent between markets and it is
- Legal to ship the goods from the cheaper market to the more expensive market.
- Illegal to ship the goods from the cheaper market to the more expensive market.
- Illegal to ship the goods from the more expensive market to the cheaper market.
- Both B and C.
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Drivers generally regard a parking violation ticket as a price because
- there is a strong social stigma attached to the violation.
- the fee is increased for repeated offense.
- there are more adverse consequences than just the fee involved.
- there is no further consequences than paying a fee.
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Scalpers perform a useful function because
- they recycle their profits to concert promoters.
- they help those who value their tickets more than their money.
- they help to reallocate tickets to those who can most afford to pay.
- they are primarily concerned that concert promoters would get hurt.
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When demand increases,
- buyers buy a larger quantity at every price.
- the whole demand curve shifts to the right.
- buyers simply move down the same demand curve
- Both A and B.
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Suppose a gas station got some gas delivery at the pre-Katrina
price of $2.00 per gallon. After Katrina, the gas delivery price went
up to $2.50. The opportunity cost of its old gas after Katrina
- stayed at $2.00 per gallon.
- had gone up to $2.50 per gallon.
- averaged between $2.00 and $2.50 per gallon.
- None of the above.
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If permits for parking spaces are sold at a price below the market-clearing level,
- those who don't pay can still compete for the same parking spaces.
- those who pay for the permits would be guaranteed parking spaces.
- an allocation system of straight first-come first-served is in force.
- both price and time would have to be used to fully allocate the scarce resources
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If prices are not allowed to adjust to clear the market, prices that are set too low would result in
- stable inventory turnover.
- no predictable inventory indicator.
- depleted inventory (i.e., excess demand or shortage).
- excessive inventory (i.e., excess supply or surplus).
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If permits for parking spaces are sold at a price below the market-clearing level,
- an allocation system of straight first-come first-served is in force.
- those who don't pay can still compete for the same parking spaces.
- those who pay for the permits would be guaranteed parking spaces.
- more permits would be sold than there are parking spaces.
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Surge pricing
- enriches Uber only without clearing the market.
- limits quantity demanded only.
- expands quantity supplied and limits quantity demanded.
- expands quantity supplied only.
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Wheat and corn farmers in Minnesota are indirectly hurt by sugar price support because
- Price-supported sugar farmers bid up the rent for farmland.
- Wheat farmers cannot easily switch to sugar beets because they are not members of the sugar coop.
- They do not enjoy price support of their own crops.
- They do not know how to grow sugar beets.
- Both A and B.
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Smuggling occurs whenever prices for similar goods are divergent between markets and it is
- illegal to ship the goods from the cheaper market to the more expensive market.
- legal to ship the goods from the cheaper market to the more expensive market.
- illegal to ship the goods from the more expensive market to the cheaper market.
- Both A and B.
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Price support
- decreases quantity demanded and increases quantity supplied.
- creates excess supply that is self-correcting.
- encourages inefficient producers to stay put instead of exiting.
- Both B and C.
- Both A and C.
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When parking spaces are fewer than the number of cars wanting to park, a market-clearing parking fee would generate
- smaller total benefit than free parking.
- larger consumer surplus than free parking.
- just paid benefit with no consumer surplus.
- larger total benefit than free parking.
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Sugar growers succeed in reducing sugar imports because
- They are low-cost producers.
- They are guaranteed a domestic market at supported prices.
- The import quota is stable while domestic output expands.
- All of the above.
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Scalpers owe their existence to
- the excess of quantity supplied over quantity demanded.
- price support.
- correctly set market-clearing prices by concert promoters.
- prices that are too low to clear the market.
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Free parking when parking spaces are scarce would
- favor the time poorer but money richer.
- generate lower total benefit than paid parking that fully allocates the spaces.
- generate higher total benefit
than paid parking because those who can't afford parking fee may still
be able to get a parking space.
- lead to more efficient time allocation among drivers.
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Uber poses competition to taxi companies because
- taxi fares are not tightly regulated.
- Uber drivers earns less than taxi drivers.
- Uber rides are less expensive than taxi rides.
- the number of Uber cars in service can be increased without getting a taxi medallion.
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If we offer less to sell at every price,
- the supply curve must have shifted to the left.
- the law of supply must be wrong.
- supply must have decreased.
- Both A and C.