Chapter 6

1) What is the difference between a rent ceiling set below the equilibrium rent and a rent ceiling set above the equilibrium rent? Give an example.

2) What are the major economic effects of rent ceilings?

3) What is a minimum wage? What are the effects of a minimum wage set below the equilibrium wage rate?

4) Discuss the inefficiencies created by a price floor.

5) How does a production quota influence farm prices and output?

Chapter 7

1) Define comparative advantage and discuss its role in international trade.

2) How does a tariff affect the domestic price of the import, the domestic consumption, the domestic production, and the quantity imported?

3) How does an import quota affect the domestic price of the import, the domestic consumption, the domestic production, and the quantity imported?

4) How does a tariff affect the government's revenue? How does an import quota affect the government's revenue?

5) Two arguments used to promote trade barriers are the infant-industry argument and the dumping argument. Explain each of these arguments and evaluate whether each one has any flaws.