Recall the application about the demand and supply of human organs and the role of government in this market. If the government was to relax its restraints on private parties selling and buying human organs, we should expect to see: A) prices of the organs rise. B) Prices of the organs to remain constant. C) Prices of the organs to decrease. D) less availability of organs.
11) Recall the application about the
A) prices of the organs rise.
B) Prices of the organs to remain constant.
C) Prices of the organs to decrease.
D) less availability of organs.
12) Recall the application about the demand and supply of human organs and the role of government in this market. Since the quantity demanded is currently greater than the quantity supplied, it can be determined that the government price is:
A) at equilibrium.
B) greater than equilibrium.
C) less than equilibrium.
D) determined by
Additional Application
Prior to 2001 Canada annually exported billions of board feet of lumber to the USA tariff-free. The two countries had followed an agreement in which there would be no restrictions on the lumber from Canadian companies. In March 2001 the agreement ended and in 2002 the USA imposed tariffs and duties on imported Canadian lumber. What were the effects of these changes and who gained and who lost?
The forestry workers of Canada were hurt. About 15,000 workers lost their jobs in British Columbia and many Canadian towns suffered from the loss of income from lumber sales and related industries. Exports to the USA fell from 14.7 billion board feet in 2000 to 20.9 million board feet in 2004. When the lumber prices rose in the USA, the costs of production for home building firms increased.
The USA government has realized $3.5 billion from the tariffs and that is sitting in the Treasury awaiting resolution of legal disputes. Lumber companies in the USA have seen their prices rise with less competition.
James Thayer, "Soft Wood, Hard Dispute," The Weekly Standard, November 18, 2005. Online
13) According to this application about the USA imposing tariffs on lumber from Canada, if the cost of production for US construction companies increased, then their ________ curve should shift ________.
A) demand; left
B) supply; right
C) demand; right
D) supply; left
14) An import restriction on automobiles would lead to an increase in the price of automobiles and a decrease in
15) The licensing of taxis through the use of medallions decreases the price of taxi service.
16) There are winners and losers from licensing programs such as a taxi medallion policy. The losers are producers, who receive lower prices for taxi rides.
17) Figure 6.9 shows the market for tobacco. If the government has no restrictions on imported tobacco, what will be the price of tobacco and the level of tobacco produced? If the government passes a law banning tobacco imports, what happens to the price of tobacco and the quantity of tobacco sold?
18) Figure 6.9 shows the market for tobacco. If the government passes a law banning tobacco imports, what happens to the total surplus of the market? Who wins and who loses as a result of this policy?
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