Recitation Problem Set #21. Effective price ceilings are inefficient because theya. create shortages.b. lead to wasted resources.c. decrease quality.d. create black markets.e. do all of the above. 2. Refer to the graph provided. If the government establishes a minimum wage at $10, how many workers will benefit from the higher wage? a.30 b.50 c.60 d.80 e.1103. Refer to the graph for question 4. With a minimum wage of $10, how manyworkers are unemployed (would like to work, but are unable to find a job)?a. 30b. 50c. 60d. 80e. 110 4. Quotas lead to which of the following? I.inefficiency due to missed opportunities II.incentives to evade or break the law III.a surplus in the marketa. Ib. IIc. IIId. I and IIe. I, II, and III5. Which of the following would decrease the effect of a quota on a market?A(n)a. decrease in demandb. increase in supplyc. increase in demandd. price ceiling above the equilibrium pricee. none of the above 6. Which of the following is true regarding equity and efficiency incompetitive markets?a. Competitive markets ensure equity and efficiency.b. There is often a trade-off between equity and efficiency.c. Competitive markets lead to neither equity nor efficiency.d. There is generally agreement about the level of equity and efficiency in amarket.e. None of the above. 7. Sony raises its price on noise canceling headphones from $50.00 to $55.00because of inflation. This increase in prices changes the producer surplus inthe marketplace. Using Figure: Market for Headphones, which geometric areashows the increase in producer surplus gained by the original sellers Sony'sheadphones?a. Ab. Bc. Cd. D8. Other things equal, a rise in price will result in which of the following?a. Producer surplus will rise; consumer surplus will rise.b. Producer surplus will fall; consumer surplus will fall.c. Producer surplus will rise; consumer surplus will fall.d. Producer surplus will fall; consumer surplus will rise.e. Producer surplus will not change; consumer surplus will
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