Question 1

Price ceilings set a legal maximum price on a product or commodity.

Accepted Answer

A) True 
 B)False

Question 2

Figure 4-12  
-The silverware industry has been in serious decline since the 1980s.Family dining habits are less formal so people purchase less silverware.Also, in 2006-2008, the price of silver increased from $5 to $20 per ounce.Which graph in Figure 4-12 best illustrates these developments?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 3

The price of coal fell and the quantity sold also fell.Everything else being equal, it is consistent that

Accepted Answer

A) the price of oil fell. 
B) coal miners received large wage increases. 
C) more efficient mining equipment was installed. 
D) consumer incomes rose. 
E) the supply of coal fell. 
A) the price of oil fell. 
B) coal miners received large wage increases. 
C) more efficient mining equipment was installed. 
D) consumer incomes rose. 
E) the supply of coal fell.

Question 4

Demand and quantity demanded are the same thing.

Accepted Answer

A) True 
 B)False

Question 5

Figure 4-16  
-Assume that Figure 4-16 shows the supply of soda.An increase in the price of syrup used in the production of soda will shift supply from

Accepted Answer

A) S1 to S2. 
B) S2 to S1. 
C) S2 to S3. 
D) S1 to S3. 
A) S1 to S2. 
B) S2 to S1. 
C) S2 to S3. 
D) S1 to S3.

Question 6

We observe that the price of food rises and the quantity purchased also rises.This means the

Accepted Answer

A) supply curve shifted to the left. 
B) demand curve shifted to the right. 
C) demand curve shifted to the left. 
D) supply curve shifted to the right. 
A) supply curve shifted to the left. 
B) demand curve shifted to the right. 
C) demand curve shifted to the left. 
D) supply curve shifted to the right.

Question 7

If price rises, what happens to supply for a product?

Accepted Answer

A) It increases. 
B) It decreases. 
C) It does not change. 
D) Uncertain-economic theory has no answer to this question. 
A) It increases. 
B) It decreases. 
C) It does not change. 
D) Uncertain-economic theory has no answer to this question.

Question 8

Some medical authorities announced in the late 1980s that an acne medicine named Retin-A also had previously unknown wrinkle-reducing properties.An economist would expect to find that, after this announcement, the price of Retin-A ____ and the quantity sold ____.

Accepted Answer

A) rose; fell 
B) rose; rose 
C) fell; fell 
D) fell; rose 
A) rose; fell 
B) rose; rose 
C) fell; fell 
D) fell; rose

Question 9

A shortage occurs when price is higher than the market equilibrium.

Accepted Answer

A) True 
 B)False

Question 10

Equilibrium price and quantity are determined by the intersection of the demand and supply curves.

Accepted Answer

A) True 
 B)False

Question 11

Economists emphasize the importance of ____ in analyzing demand.

Accepted Answer

A) quantity 
B) market potential 
C) wants and needs 
D) price 
E) sales opportunities 
A) quantity 
B) market potential 
C) wants and needs 
D) price 
E) sales opportunities

Question 12

Shortages normally accompany an effective price floor.

Accepted Answer

A) True 
 B)False

Question 13

Demand curves can be affected by the prices of related goods.

Accepted Answer

A) True 
 B)False

Question 14

Price ceilings lead to market surpluses.

Accepted Answer

A) True 
 B)False

Question 15

Figure 4-10  
-The rising minimum wage allegedly has reduced the quantity demanded of teenage labor.However, demographics slightly reduced the supply of teenage labor.The U.S.Department of Labor reported that teenage unemployment is an increasing problem.Which graph in Figure 4-10 is consistent with these facts?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 16

In an attempt to forecast enrollment, a major university hired an economist to give a "head count." One variable which she would probably emphasize more than any other in trying to forecast this is

Accepted Answer

A) how interested people are in attending college. 
B) the employment opportunities that college opens up. 
C) survey results on public interest in education. 
D) her instinct about what the public wants. 
E) tuition (the price of attending). 
A) how interested people are in attending college. 
B) the employment opportunities that college opens up. 
C) survey results on public interest in education. 
D) her instinct about what the public wants. 
E) tuition (the price of attending).

Question 17

Price ceilings will likely result in the growth of black markets.

Accepted Answer

A) True 
 B)False

Question 18

A severe freeze has once again damaged the Florida orange crop.The impact on the market for oranges will be a leftward shift in

Accepted Answer

A) demand as consumers try to economize because of the shortage. 
B) both the supply and demand curves. 
C) the supply curve. 
D) the supply curve and a rightward shift in the demand curve, which will result in a higher price. 
A) demand as consumers try to economize because of the shortage. 
B) both the supply and demand curves. 
C) the supply curve. 
D) the supply curve and a rightward shift in the demand curve, which will result in a higher price.

Question 19

A supply schedule shows

Accepted Answer

A) the "market potential" for a product. 
B) how much producers are willing and able to sell at different prices. 
C) possible combinations of output under different conditions. 
D) how much consumers would like to buy at different prices. 
E) All of the above are correct. 
A) the "market potential" for a product. 
B) how much producers are willing and able to sell at different prices. 
C) possible combinations of output under different conditions. 
D) how much consumers would like to buy at different prices. 
E) All of the above are correct.

Question 20

Enacting a law controlling rents near a major university will increase the affordable housing for college students.

Accepted Answer

A) True 
 B)False

Exam 4: Supply and Demand an Initial Look

Price ceilings set a legal maximum price on a product or commodity.

Figure 4-12 -The silverware industry has been in serious decline since the 1980s.Family dining habits are less formal so people purchase less silverware.Also, in 2006-2008, the price of silver increased from $5 to $20 per ounce.Which graph in Figure 4-12 best illustrates these developments?

The price of coal fell and the quantity sold also fell.Everything else being equal, it is consistent that

Demand and quantity demanded are the same thing.

Figure 4-16 -Assume that Figure 4-16 shows the supply of soda.An increase in the price of syrup used in the production of soda will shift supply from

We observe that the price of food rises and the quantity purchased also rises.This means the

If price rises, what happens to supply for a product?

Some medical authorities announced in the late 1980s that an acne medicine named Retin-A also had previously unknown wrinkle-reducing properties.An economist would expect to find that, after this announcement, the price of Retin-A ____ and the quantity sold ____.

A shortage occurs when price is higher than the market equilibrium.

Equilibrium price and quantity are determined by the intersection of the demand and supply curves.

Economists emphasize the importance of ____ in analyzing demand.

Shortages normally accompany an effective price floor.

Demand curves can be affected by the prices of related goods.

Price ceilings lead to market surpluses.

In an attempt to forecast enrollment, a major university hired an economist to give a "head count." One variable which she would probably emphasize more than any other in trying to forecast this is

Price ceilings will likely result in the growth of black markets.

A severe freeze has once again damaged the Florida orange crop.The impact on the market for oranges will be a leftward shift in

A supply schedule shows

Enacting a law controlling rents near a major university will increase the affordable housing for college students.

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

Consumer Choice Individual and Market Demand

Demand and Elasticity

Production Inputs and Cost Building Blocks for Supply Analysis

Output Price and Profit the Importance of Marginal Analysis

Securities Business Finance and the Economy the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power Regulation and Antitrust

The Case for Free Markets the Price System

The Shortcomings of Free Markets

Externalities the Environment and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship the Human Inputs

Poverty Inequality and Discrimination

Is Us Economic Leadership Threatened

International Trade and Comparative Advantage

Filters

Some medical authorities announced in the late 1980s that an acne medicine named Retin-A also had previously unknown wrinkle-reducing properties.An economist would expect to find that, after this announcement, the price of Retin-A and the quantity sold .