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1) At any disequilibrium price, whether government controlled or not, the quantity actually exchanged is
determined by
A) the elasticity of supply.
B) the elasticity of demand.
C) government decree.
D) the lesser of quantity demanded and quantity supplied.
E) the greater of quantity demanded and quantity supplied.
Answer: D
Diff: 1
Topic: 5.1a. price controls
Skill: Recall
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
2) Consider a competitive labour market. The likely consequence of a binding minimum wage in this
labour market is
A) a labour shortage.
B) a lower wage for all individuals.
C) a higher wage for all individuals.
D) excess demand for workers.
E) unemployment.
Answer: E
Diff: 1
Topic: 5.1a. price controls
1
Copyright © 2017 Pearson Education, Inc.
Skill: Applied
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
2
Copyright © 2017 Pearson Education, Inc.
4) In a market where we observe a disequilibrium, quantity exchanged is determined
A) by the quantity demanded.
B) by the greater of quantity demanded and quantity supplied.
C) by neither quantity demanded nor quantity supplied.
D) by the lesser of quantity demanded and quantity supplied.
E) by the quantity supplied.
Answer: D
Diff: 1
Topic: 5.1a. price controls
Skill: Recall
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
5) Which of the following statements about government price controls is most accurate. They
A) act as a guideline to producers as to what is a fair price.
B) inform consumers what is the maximum price they should pay.
C) usually set upper or lower limits on prices.
D) ensure that the actual price is at its free-market equilibrium.
E) ensure that transactions take place at a fair price.
Answer: C
Diff: 1
Topic: 5.1a. price controls
Skill: Recall
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
6) The price of a good or a service can be determined by free interaction of demand and supply or by a
government price regulation. One important difference between these two price-determining methods is
A) there are no shortages or surpluses at the free-market equilibrium price.
B) regulated prices are fairer since more people can then afford the goods or services.
C) that a regulated price above the equilibrium price will always result in shortages.
D) the government is in the best position to know the needs of the people.
E) one is capitalist and the other is communist.
Answer: A
Diff: 1
Topic: 5.1a. price controls
Skill: Applied
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
3
Copyright © 2017 Pearson Education, Inc.
7) Consider a market in which there is a government-set price. If there is excess demand at this price,
A) the market is in its free-market equilibrium.
B) the market is in disequilibrium.
C) there are unsuccessful sellers.
D) the product has not reached the point of saturation.
E) none of the product will be exchanged.
Answer: B
Diff: 1
Topic: 5.1a. price controls
Skill: Applied
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
13) If the government fixes the price of good X above its free-market equilibrium level, we should expect
A) a surplus of good X to occur.
B) a shortage of good X to occur.
C) an excess demand for good X.
D) a black market to arise for good X.
E) a new free-market equilibrium price to be established.
Answer: A
Diff: 1
Topic: 5.1b. price floors and ceilings
Skill: Applied
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
5
Copyright © 2017 Pearson Education, Inc.
14) A legally imposed upper limit on a price is called
A) a price floor.
B) a price support.
C) an excise price.
D) a price ceiling.
E) a government price.
Answer: D
Diff: 1
Topic: 5.1b. price floors and ceilings
Skill: Recall
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
17) In which type of market would a government be most likely to establish a "legal" price floor?
A) housing market
B) labour market
C) diamond market
D) electricity market
E) natural gas market
Answer: B
Diff: 2
Topic: 5.1b. price floors and ceilings
Skill: Applied
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
6
Copyright © 2017 Pearson Education, Inc.
18) For a price floor to be binding, it must be set
A) very low.
B) at the free-market equilibrium price.
C) below the free-market equilibrium price.
D) at a level such that there exists some unsatisfied demand.
E) above the free-market equilibrium price.
Answer: E
Diff: 1
Topic: 5.1b. price floors and ceilings
Skill: Recall
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
19) Consider the market for pulp and paper. Suppose, in an attempt to help this industry, the government
sets a price floor above the free-market equilibrium price. The result will be
A) a continuation of the market-determined equilibrium price and quantity.
B) the quantity demanded will exceed quantity supplied and there will be a shortage in the market.
C) the quantity supplied will exceed quantity demanded and there will be a surplus in the market.
D) a new free-market equilibrium at a higher price and lower output level.
E) increased government revenue.
Answer: C
Diff: 2
Topic: 5.1b. price floors and ceilings
Skill: Applied
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
20) Consider the market for iron ore, an important industrial input. Suppose the government sets a price
floor below the free-market equilibrium price. The result will be
A) a continuation of the free-market equilibrium price and quantity.
B) the quantity demanded will exceed quantity supplied and there will be a shortage in the market.
C) the quantity supplied will exceed quantity demanded and there will be a surplus in the market.
D) a new free-market equilibrium at a lower price and higher output level.
E) increased government revenue.
Answer: A
Diff: 2
Topic: 5.1b. price floors and ceilings
Skill: Applied
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
7
Copyright © 2017 Pearson Education, Inc.
21) An excess supply of some product is the same thing as
A) a surplus.
B) an excess demand.
C) a shortage.
D) scarcity.
E) price floor.
Answer: A
Diff: 1
Topic: 5.1b. price floors and ceilings
Skill: Recall
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
23) Suppose the government establishes a binding price floor for some product. At the price floor,
A) although sellers are selling all of the product that they desire, consumers are not able to buy all that
they desire.
B) a new free-market equilibrium price and quantity will be established.
C) both sellers and buyers are satisfied with the quantity that is being exchanged.
D) both sellers and buyers are exchanging the free-market equilibrium quantity.
E) although consumers are purchasing all of the product they desire at this price, the sellers are not
selling all they desire.
Answer: E
Diff: 2
Topic: 5.1b. price floors and ceilings
Skill: Recall
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
8
Copyright © 2017 Pearson Education, Inc.
24) Suppose the government decides to eliminate a binding price floor that it had previously imposed on
a particular good. It can be expected that
A) the price would increase, the quantity demanded would decrease and the quantity supplied would
increase.
B) the price would increase, the quantity demanded would increase and the quantity supplied would
decrease.
C) the price would decrease, the quantity demanded would decrease and the quantity supplied would
increase.
D) the price would decrease, the quantity demanded would increase and the quantity supplied would
decrease.
E) no changes would take place.
Answer: D
Diff: 2
Topic: 5.1b. price floors and ceilings
Skill: Applied
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
25) Suppose the government decides to eliminate a binding price ceiling that it had previously imposed
on a particular good. It can be expected that
A) the price would increase, quantity demanded would decrease, and quantity supplied would decrease.
B) the price would increase, quantity demanded would decrease, and quantity supplied would increase.
C) the price would decrease, quantity demanded would decrease, and quantity supplied would increase.
D) the price would decrease, quantity demanded would increase, and quantity supplied would decrease.
E) no change would take place
Answer: B
Diff: 2
Topic: 5.1b. price floors and ceilings
Skill: Applied
User2: Qualitative
9
Copyright © 2017 Pearson Education, Inc.
27) If the equilibrium wage in a competitive labour market is $9 per hour, and the government raises the
minimum wage from $7 to $8 per hour, what will be the effect in this market?
A) the level of employment will decrease
B) unemployment will increase
C) unemployment will decrease
D) there will be no effect on employment
E) the average wage paid to workers will increase
Answer: D
Diff: 2
Topic: 5.1b. price floors and ceilings
Skill: Applied
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
28) For a legislated minimum wage to be binding in a competitive labour market, it must be set
A) below the free-market wage.
B) equal to the free-market wage.
C) above the free-market wage.
D) at or below the free-market wage.
E) such that no worker can earn more than the established minimum wage.
Answer: C
Diff: 1
Topic: 5.1b. price floors and ceilings
Skill: Recall
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
10
Copyright © 2017 Pearson Education, Inc.
30) A price ceiling set below the free-market equilibrium price will result in
A) a clearing of the market.
B) greater quantity exchanged.
C) surpluses.
D) excess demand.
E) excess supply.
Answer: D
Diff: 1
Topic: 5.1b. price floors and ceilings
Skill: Recall
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
31) Suppose the free-market equilibrium price for ice time at privately operated hockey arenas is $250 per
hour. If the municipal government imposes a price ceiling of $130 per hour, we can expect to see
A) an adjustment of the free-market equilibrium price to $100.
B) an excess supply of ice time.
C) a black market price below the free-market equilibrium price.
D) that neither excess supply nor excess demand is created.
E) an excess demand for ice time.
Answer: E
Diff: 2
Topic: 5.1b. price floors and ceilings
Skill: Applied
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
32) In a competitive market, a legal price ceiling set above the free-market equilibrium price will result in
A) a continuation of the free-market equilibrium price and quantity.
B) the quantity demanded exceeding quantity supplied and thus a shortage in the market.
C) the quantity supplied exceeding quantity demanded and thus a surplus in the market.
D) a new free-market equilibrium at a higher price and lower output level.
E) increased profits to the firms in the industry.
Answer: A
Diff: 2
Topic: 5.1b. price floors and ceilings
Skill: Recall
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
11
Copyright © 2017 Pearson Education, Inc.
33) In a competitive market, a price ceiling set below the free-market equilibrium price will result in
A) a continuation of the free-market equilibrium price and quantity.
B) the quantity demanded exceeding quantity supplied and thus a shortage in the market.
C) the quantity supplied exceeding quantity demanded and thus a surplus in the market.
D) a new free-market equilibrium at a lower price and higher output level.
E) excess supply.
Answer: B
Diff: 2
Topic: 5.1b. price floors and ceilings
Skill: Recall
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
34) Which of the following statements best differentiates price ceilings and price floors?
A) Price ceilings represent minimum prices, while price floors represent maximum prices.
B) Binding price ceilings are always set below the equilibrium price, whereas binding price floors are
always set above the equilibrium price.
C) Price ceilings are always effective, whereas price floors are rarely effective.
D) Price floors cause shortages to appear, whereas price ceilings have the opposite effect.
E) Price ceilings and price floors have the same effects.
Answer: B
Diff: 2
Topic: 5.1b. price floors and ceilings
Skill: Recall
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
35) Suppose that the free-market equilibrium price of natural gas would be $2.00 per unit, but in an effort
to protect consumers the government has fixed the price at $1.50. At this ceiling price the quantity
________ will be greater than the quantity ________, resulting in a ________ of natural gas.
A) demanded; supplied; surplus
B) supplied; demanded; surplus
C) demanded; supplied; shortage
D) supplied; demanded; shortage
E) demanded; supplied; reduction in equilibrium price
Answer: C
Diff: 2
Topic: 5.1b. price floors and ceilings
Skill: Applied
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
12
Copyright © 2017 Pearson Education, Inc.
36) Suppose that the free-market equilibrium price of downtown-to-airport taxi service would be $45 per
trip, but in an effort to protect taxi owners the government has fixed the price at $60 per trip. At this
legislated price the quantity ________ will be greater than the quantity ________, resulting in a ________
of downtown-to-airport taxi services.
A) demanded; supplied; surplus
B) supplied; demanded; surplus
C) demanded; supplied; shortage
D) supplied; demanded; shortage
E) demanded; supplied; reduction in equilibrium price
Answer: B
Diff: 2
Topic: 5.1b. price floors and ceilings
Skill: Applied
User2: Qualitative
37) If the free-market equilibrium price for some product is $25, then a legal price ceiling set at $15 will
bring about
A) the same general effects as a price ceiling of $25.
B) the same general effects as an equilibrium price of $15.
C) no change in the market outcomes.
D) a surplus of the good.
E) a shortage of the good.
Answer: E
Diff: 1
Topic: 5.1b. price floors and ceilings
Skill: Applied
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
13
Copyright © 2017 Pearson Education, Inc.
39) With respect to some commodity, X, if government objectives are to (1) restrict production and (2)
keep prices down to protect consumers, then legislated price ceilings will
A) be a dismal failure as neither goal can ever be achieved with price ceilings.
B) satisfy both goals but only if a black market develops.
C) satisfy only the second goal if a black market develops.
D) only have an effect on commodities at the international level.
E) satisfy both goals as long as a black market does not develop.
Answer: E
Diff: 3
Topic: 5.1b. price floors and ceilings
Skill: Applied
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
41) If the government imposes a price ceiling for some product, and a black market subsequently
develops that gains control of all of the reduced output of the product, then
A) the black market price will be lower than the ceiling price.
B) excess profits will flow back to consumers.
C) the quantity demanded will exceed quantity supplied at the black market price.
D) the black market price will be higher than the free-market equilibrium price.
E) consumers will be better off than they would be in the absence of the black market.
Answer: D
Diff: 2
Topic: 5.1b. price floors and ceilings
Skill: Applied
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
14
Copyright © 2017 Pearson Education, Inc.
42) If a binding price floor is in place and if the demand curve for the product shifts rightward, one
consequence would be
A) an increase in the amount of excess demand.
B) a decrease in the amount of excess demand.
C) an increase in the amount of excess supply.
D) a decrease in the amount of excess supply.
E) a decrease in the quantity exchanged.
Answer: D
Diff: 2
Topic: 5.1b. price floors and ceilings
Skill: Applied
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
43) If a binding price ceiling is in place and if the demand curve for the product shifts rightward, one
consequence would be
A) the quantity exchanged would increase.
B) the quantity exchanged would remain constant.
C) the quantity exchanged would decrease.
D) an increase in the amount of excess supply.
E) a decrease in the amount of excess demand.
Answer: B
Diff: 2
Topic: 5.1b. price floors and ceilings
Skill: Applied
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
44) The surpluses associated with a binding price floor will be the smallest when
A) both supply and demand are highly elastic.
B) both supply and demand are highly inelastic.
C) supply is highly elastic and demand is highly inelastic.
D) supply is highly inelastic and demand is highly elastic.
E) both supply and demand are unit elastic.
Answer: B
Diff: 2
Topic: 5.1b. price floors and ceilings
Skill: Applied
Learning Obj.: 5-2 Compare the short-run and long-run effects of legislated rent controls.
User2: Qualitative
15
Copyright © 2017 Pearson Education, Inc.
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they might fall on us in the bush, where the odds would have been
against us, and so destroy us altogether.
Then when they saw how we took the rumours, we heard they
changed their tactics, and tried to throw us off our guard again by
talking about making friends, signing treaties, and so on, meaning, if
they could secure our confidence, to fall suddenly upon us en
masse. The plan was ingenious certainly, but those who concocted it
had reckoned without allowing for Osman’s stupidity.
What became of the Toucouleur column after all? Not having
dared through fear of our guns to march against us, it had turned its
attention to Dentchendu, a big village on the left bank; but the chief
hesitated too long in this case also, giving time for the inhabitants to
receive warning, to put their village in a state of defence, and send
all the useless mouths away.
Again the Toucouleurs were too late, and besides, as Osman,
who still visited us in spite of all our rebuffs, told us, the poison of the
Dentchendu arrows is very dangerous.
All these warriors are fond of fighting and going on slave raids, for
the glory of the Prophet, but they take very good care of their own
skins. We wondered if the Toucouleurs who remained faithful to
Amadu would become cowards like his own people through contact
with them. Our experiences made us think that we were indeed far
from the heroic days, when the Senegalese Foutankés, in the battle
of Kale, charged a column on the march to rescue the wives of
Ahmadu who had been taken prisoners, stopping suddenly beneath
a hail of bullets from the French sharp-shooters to prostrate
themselves, and make a propitiatory salaam.
Having through fear abandoned the idea of attacking us at Fort
Archinard, the column wandered in the rain from village to village,
and was received everywhere with apparent friendship by the
terrified inhabitants, so that all the fire ended in smoke, though no
one seemed to know exactly why.
LAUNCHING OF THE ‘AUBE’ AT SAY.
We were off again with light hearts full of hope, to face new
rapids!
A YOUNG KURTEYE.
NATIVES OF MALALI.
CHAPTER IX
Below Fort Archinard the river divides into a number of arms; the
islands formed by them as well as the banks of the river were
deserted, but clothed with lofty trees, such as baobabs, palms, and
other tropical growths.
Although the water was now pretty well at its maximum height, a
good many scarcely-covered rocks impeded its bed, and rapids were
numerous. Of little danger to us, for we had seen worse, and safely
passed them, but bad enough to make navigation impossible to a
steamer.
On September 16, at about seven o’clock in the morning, we
passed a little encampment on the left bank, consisting of one hut,
and some millet granaries. I imagine this to have been the landing-
place for Kibtachi, for at half-past five in the afternoon we found we
had made some forty-four miles since we started, so we must have
passed the village without seeing it. I was sorry not to have been
able to visit the mines of bracelets and rings, probably of cornelian,
of which the natives had told me, but at the same time I did not
altogether regret having avoided coming into contact, just before
entering Dendi, with tribes then at war with its people.
The next day, the 17th, the river still wound in much the same way
as on the 16th; in fact, so serpentine was its course, that one of the
coolies cried out he did not believe we were on the Niger still, but
that we had lost our way. Numerous islands and dense vegetation,
with very picturesque views here and there, were the order of the
day. Great blocks of red sandstone rose in some places to a height
of from about thirty to more than three hundred feet, and at every
bend of the stream some new or strange view met our eyes.
We longed to land and seek repose beneath the thick dome of
vegetation forming natural arbours, but there was one great
drawback about them, the immense number of insects eager to suck
our blood. At night the mosquitoes invaded us in vast hordes, and
our poor coolies used to roll themselves up in everything they could
lay hands on, at the risk of suffocation. As for us, we too suffered
terribly, for though when we were asleep our mosquito nets did to
some extent protect us, when we were on watch on deck we were
nearly bled to death. In the day these pests left us pretty well
unmolested, but their place was taken by other persecutors, rather
like gadflies, which were able to pierce through our white clothes
with a sting as sharp and nearly as long as a needle. I had suffered
terribly once before from these horrible diptera when I was on the
Tankisso; in fact they haunt the tropical vegetation of many an
African river.
Since we started we had been each day threatened with a
tornado, but the storm had not broken after all. On the 18th,
however, we came in for the tail of one of these meteorological
disturbances, and a pretty strong breeze lasted until eleven o’clock
so that we were not able to start before that time.
The appearance of the country now began to change. Yesterday I
had been reminded by the rocky islets and the wooded banks, of the
Niger near Bamako; to-day the stream flows sluggishly through a low
plain covered with woods such as those of Massina between Mopti
and Debo. A few rocks still occurred to keep up the character of the
scenery, so to speak, and about three o’clock in the afternoon we
were opposite the site of the village of Gumba, destroyed the year
before by the Toucouleurs. We saw a canoe in which were some
fishermen, so we hailed them and they approached us without fear.
They were inhabitants of Kompa, they said, come here to fish, and
were the first human beings we had seen since we left Say. We had
passed not only Kibtachi but Bikini without meeting any one. The
result of the constant terrorism caused by slave raids, is that all the
villagers remain quietly at home cultivating a few acres only, and
living in perpetual fear of being carried away from their huts. They
altogether neglect the natural riches of the soil formed by the
frequent inundations, which leave new layers of vegetable mould.
The baobabs and other wild trees alone profit by it, increasing and
multiplying continually.