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- Q 1/8Score 0
Price is initially at P1. If the producers now set a minimum price of OPmin, what effect would this have?
29The amount sold would increase from OQ1 to OQ2.
The market price would fall from OP1 to OPmin.
It would encourage suppliers to increase production from OQ1 to OQ2.
Equilibrium price and quantity would remain at OP1 and OQ1.
- Q1
Price is initially at P1. If the producers now set a minimum price of OPmin, what effect would this have?
The amount sold would increase from OQ1 to OQ2.
The market price would fall from OP1 to OPmin.
It would encourage suppliers to increase production from OQ1 to OQ2.
Equilibrium price and quantity would remain at OP1 and OQ1.
30s1.4.1d - Q2
A government decides to impose a maximum price of Pmax. The most likely outcome would be
an excess supply of wheat of EF.
a shortage of wheat of EF.
a reduction in price from Pmax to P.
the equilibrium price OP being maintained.
30s1.4.1c - Q3
To maintain a price of 0P2 by intervention buying, how much needs to be spent by the government?
OP1 x OQ1
OP2 x Q2Q3
OP2 x OQ2
OP2 x OQ3
30s1.4.1d - Q4
Rent is initially at P. If a maximum rent of Pmax is imposed, the effect will be to
decrease the amount of accommodation available from Q2 to Q1.
decrease the amount of accommodation available from Q to Q1.
increase the amount of accommodation available from Q1 to Q2.
increase the amount of accommodation available from Q to Q2.
30s1.4.1c - Q5
The government of the country decides that domestic farmers will receive a minimum price for butter produced of £15 per unit and arranges to sell the surplus butter to foreign buyers at £5 per unit. The cost of this scheme to the government will be
£225 million
£150 million
£75 million
£100 million
30s1.4.1d - Q6
An increase in incomes causes the demand curve to shift from D1 to D2 but, in an effort to prevent the price from rising, the government fixes the maximum price of the good at P.
If the price control is effective, which one of the following is most likely to occur?
The quantity sold remains at OX and there is an unsatisfied demand XZ.
The quantity sold increases to OY and there is an unsatisfied demand YZ.
The quantity sold remains at OX and there is an unsatisfied demand XY
The quantity sold increases to OZ and there is no unsatisfied demand.
30s1.4.1c - Q7
The government fixes the minimum price at £9. How much will such an action cost the government each year?
£36 000
£72 000
£54 000
£90 000
30s1.4.1d - Q8
Price is initially at P1. If producers now set a minimum price of OPmin, what effect will this have?
Amount sold increases from Q1 to Q2
Equilibrium price and quantity will remain at OP1 and OQ1
The market price will fall from OP1 to OPmin.
Supply increases from Q1 to Q2
30s1.4.1d
