Economics 103 Worksheet With Answers - Fall 2012 Page 27
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36Answer: D
130) Suppose the government imposes a price ceiling on gasoline that is less than the
equilibrium price. As a result,
A) the price of gasoline rises to the equilibrium price.
B) there is incentive for buyers to undertake search activity.
C) the supply of gasoline will increase and the supply curve will shift rightward.
D) the demand for gasoline will decrease and the demand curve will shift leftward.
Answer: B
131) Price ceilings, such as rent ceilings, set below the equilibrium price
A) increase producer surplus.
B) decrease producer surplus.
C) do not affect producer surplus.
D) might increase or decrease producer surplus.
Answer: B
132) When a rent ceiling is imposed in a housing market, the opportunity cost of housing
equals the
A) rent.
B) market equilibrium rent that would prevail in the absence of a rent ceiling.
C) value of the time and resources spent searching plus the rent.
D) consumer surplus.
Answer: C
133) In the figure below, the initial demand curve is D 0 . There are no rent ceilings nor
rent floors. The equilibrium monthly rent is
A) $100 per month.
B) $200 per month.
C) $300 per month.
D) $400 per month.
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