78. A price ceiling is a government-mandated a. minimum price below which legal trades cannot be made. b. maximum price above which legal trades cannot be made. C. minimum price above which legal trades cannot be made. d. maximum price below which legal trades cannot be made. 79. Which of the following would not result from a price ceiling (below equilibrium price)? a. a shortage b. fewer exchanges c. an increase in supply d. nonprice rationing devices 80. Suppose the government imposes a price ceiling on a good above its equilibrium price. Which of the following is a likely result? a. Some other rationing device will emerge to allocate the good among buyers. b. Some buyers and sellers will be willing to risk breaking the law in order to exchange the goods. c. No change will occur in the market. d. There may be buyers who are willing to pay quite high prices so they can consume more than what they are consuming now. e. a, b, and d 81. Suppose you live in New York City and the government has imposed rent ceilings on apartments. You want to rent an apartment from Smith, who says that unless you buy the furniture in the apartment for $4,000, he cannot rent the apartment to you. The condition of buying the furniture could be considered a. a price ceiling. b. a price floor. c. a tie-in sale. d. something no renter would agree to. e. c and d 82. Jake is an excellent barber. However, all customers who come to him for a haircut must buy a bottle of shampoo. This type of arrangement is known as a. a tie-in sale. b. a sweetheart deal. c. an exclusive contract. d. a cross subsidy. 83. Refer to Exhibit 3-11. The number of units exchanged at the price ceiling is a. 75. b. 125. c. 175. d. 100 (175 - 75). 84. Refer to Exhibit 3-11. How many fewer units are exchanged because of the price ceiling than ultimately would be exchanged in a free market? a. 75 b. 60 c. 100 d. 65 e. none of the above 85. Refer to Exhibit 3-11. Suppose the good shown is being sold at the $6 price ceiling. At a quantity of 75 units, what is the maximum per-unit price buyers would be willing to pay for a good “tied” to the good shown in the exhibit? a. $10 b. $8 c. $6 d. $4 e. none of the above 86. Refer to Exhibit 3-11. Some buyers will offer sellers $7 per unit instead of the $6 price ceiling because a. $7 is closer to the equilibrium price and buyers prefer equilibrium prices to all others. b. they think it is only fair for sellers to receive higher prices. c. they want to increase their chances of buying a good that is in shortage. d. it is customary to pay more than the price ceiling. 87. Which of the following statements is true? a. Price ceilings cause shortages. b. Shortages cause price ceilings to be imposed. c. Neither a price ceiling nor a shortage is the cause of the other. d. Price ceilings cannot be imposed for longer than a month. 88. Buyers prefer lower prices to higher prices a. always. b. never. c. rarely. d. ceteris paribus. 89. A price floor is a government-mandated a. minimum price below which legal trades cannot be made. b. maximum price above which legal trades cannot be made. c. minimum price at which all units of the good must be legally sold. d. minimum price below which legal trades can be made. 90. One of the effects of a price floor (above equilibrium price) is a. a surplus. b. higher-quality goods are produced. c. more satisfied customers. d. all of the above e. none of the above