Question 1

Exhibit 4-5
  
-Refer to Exhibit 4-5. Suppose the government imposes a price ceiling at P = $0 for transplanted kidneys. The result will be a

Accepted Answer

A) shortage of kidneys equal to (Q3 - Q1). 
B) surplus of kidneys equal to (Q3 - Q1). 
C) shortage of kidneys equal to (Q2 - Q1). 
D) surplus of kidneys equal to (Q2 - Q1). 
A) shortage of kidneys equal to (Q3 - Q1). 
B) surplus of kidneys equal to (Q3 - Q1). 
C) shortage of kidneys equal to (Q2 - Q1). 
D) surplus of kidneys equal to (Q2 - Q1).

Question 2

Suppose that the government sets a price ceiling in the market for potatoes at $0.75 per pound of potatoes. If the equilibrium price of potatoes is $1.10, the result of the price ceiling will be a _____________ of potatoes and ____________ exchanges will be made with the price ceiling than would be made in a free market.

Accepted Answer

A) shortage; fewer 
B) surplus; fewer 
C) shortage; more 
D) surplus; more 
A) shortage; fewer 
B) surplus; fewer 
C) shortage; more 
D) surplus; more

Question 3

There is currently a price ceiling in the market for transplanted kidneys, which has helped to create a shortage of transplanted kidneys.

Accepted Answer

A) True 
 B)False

Question 4

In order for a price ceiling to have an impact on a market it must be set above the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 5

Exhibit 4-8
  
-Refer to Exhibit 4-8. Suppose that wheat producers lobby the government for a price floor and receive one. This price floor is set at PF. How many fewer units of wheat will be sold at the price floor than at the equilibrium price?

Accepted Answer

A) Q2 - Q1 
B) Q3 - Q2 
C) Q3 - Q1 
D) Q2 
A) Q2 - Q1 
B) Q3 - Q2 
C) Q3 - Q1 
D) Q2

Question 6

Exhibit 4-8
  
-Refer to Exhibit 4-8. Suppose that wheat producers lobby the government for a price floor and receive one. This price floor is set at PF. What is the change in the total surplus at the price floor, compared to at the equilibrium price?

Accepted Answer

A) There was a gain in total surplus equal to (area 1 + 2 + 3) 
B) There was a gain in total surplus equal to (area 1 + 2 + 3 + 4 + 5) 
C) There was a loss in total surplus equal to (area 4 + 5) 
D) There was a loss in total surplus equal to (area 4 + 5 + 6 ) 
A) There was a gain in total surplus equal to (area 1 + 2 + 3) 
B) There was a gain in total surplus equal to (area 1 + 2 + 3 + 4 + 5) 
C) There was a loss in total surplus equal to (area 4 + 5) 
D) There was a loss in total surplus equal to (area 4 + 5 + 6 )

Question 7

If the current market price of good Z is below the equilibrium price of good Z

Accepted Answer

A) it must be because the government has imposed a price ceiling in the market for good Z. 
B) there is a shortage of good Z. 
C) there is a surplus of good Z. 
D) demand must necessarily decrease to restore equilibrium. 
E) a and b 
A) it must be because the government has imposed a price ceiling in the market for good Z. 
B) there is a shortage of good Z. 
C) there is a surplus of good Z. 
D) demand must necessarily decrease to restore equilibrium. 
E) a and b

Question 8

Exhibit 4-3
  
-Refer to Exhibit 4-3. Which of the following is true?

Accepted Answer

A) If price P1 is set as a price ceiling, the price ceiling will have an effect on the market for good X. 
B) If price P1 is set as a price floor, the price floor will have an effect on the market for good X. 
C) Price P1 is the equilibrium price for good X. 
D) If price P1 is set as a price floor, then it is the highest price that can legally be charged in the market for good X. 
A) If price P1 is set as a price ceiling, the price ceiling will have an effect on the market for good X. 
B) If price P1 is set as a price floor, the price floor will have an effect on the market for good X. 
C) Price P1 is the equilibrium price for good X. 
D) If price P1 is set as a price floor, then it is the highest price that can legally be charged in the market for good X.

Question 9

Exhibit 4-5
  
-Refer to Exhibit 4-5. If a free market were allowed in the transplanted kidney market, then the equilibrium price would be P2. The number of kidneys transplanted would increase by _________ compared to the number transplanted at a price ceiling of P= $0.

Accepted Answer

A) (Q3 - Q1) 
B) (Q3 - Q2) 
C) (Q2 - Q1) 
D) Q2 
A) (Q3 - Q1) 
B) (Q3 - Q2) 
C) (Q2 - Q1) 
D) Q2

Question 10

​
Exhibit 4-11
​
  
-Refer to Exhibit 4-11. Suppose that the government imposes a price ceiling in the market for good ABC at a price of $4. How many fewer units would be exchanged at the price ceiling than would be exchanged if the market for good ABC were a free market?

Accepted Answer

A) 20 
B) 40 
C) 60 
D) 80 
E) 100 
A) 20 
B) 40 
C) 60 
D) 80 
E) 100

Question 11

The minimum wage is an example of a

Accepted Answer

A) price door. 
B) price wall. 
C) price floor. 
D) price ceiling. 
A) price door. 
B) price wall. 
C) price floor. 
D) price ceiling.

Question 12

Someone says, "Even though the equilibrium wage rate is $8 an hour in the unskilled labor market, if we impose a minimum wage of $10 an hour, no one currently working will lose his or her job." This person must believe that the

Accepted Answer

A) demand curve for unskilled labor is vertical. 
B) demand curve for unskilled labor is downward-sloping. 
C) supply curve for unskilled labor is downward-sloping. 
D) supply curve for unskilled labor is horizontal. 
E) none of the above. 
A) demand curve for unskilled labor is vertical. 
B) demand curve for unskilled labor is downward-sloping. 
C) supply curve for unskilled labor is downward-sloping. 
D) supply curve for unskilled labor is horizontal. 
E) none of the above.

Question 13

-Refer to Situation 4-1. An economist would have most likely predicted that once price controls were abolished in the spring of 1974,

Accepted Answer

A) the price of gasoline would decline sharply. 
B) the surplus of gasoline would go away. 
C) the shortage of gasoline would go away. 
D) the demand for gasoline would decrease. 
E) both c and d 
A) the price of gasoline would decline sharply. 
B) the surplus of gasoline would go away. 
C) the shortage of gasoline would go away. 
D) the demand for gasoline would decrease. 
E) both c and d

Question 14

Exhibit 4-1
  
-Refer to Exhibit 4-1. At the equilibrium price, ________ units of the good would be exchanged. With a price ceiling, _______ units of the good would be exchanged.

Accepted Answer

A) 125; 75 
B) 75; 125 
C) 175; 125 
D) 125; 175 
A) 125; 75 
B) 75; 125 
C) 175; 125 
D) 125; 175

Question 15

Exhibit 4-8
  
-Refer to Exhibit 4-8. If the wheat market is in competitive equilibrium, the consumers' surplus will equal

Accepted Answer

A) area 1 + 2 + 3 
B) area 1 + 2 + 4 
C) area 3 + 5 
D) area 1 + 2 + 3 + 4 + 5 
E) area 6 
A) area 1 + 2 + 3 
B) area 1 + 2 + 4 
C) area 3 + 5 
D) area 1 + 2 + 3 + 4 + 5 
E) area 6

Question 16

Buyers always prefer lower prices to higher prices.

Accepted Answer

A) True 
 B)False

Question 17

If the minimum wage law sets a price floor that is below the equilibrium wage in the unskilled labor market, the minimum wage will create a shortage of unskilled labor.

Accepted Answer

A) True 
 B)False

Question 18

A price floor is a government-mandated

Accepted Answer

A) minimum price below which legal trades cannot be made. 
B) maximum price above which legal trades cannot be made. 
C) minimum price at which all units of the good must be legally sold. 
D) minimum price below which legal trades can be made. 
A) minimum price below which legal trades cannot be made. 
B) maximum price above which legal trades cannot be made. 
C) minimum price at which all units of the good must be legally sold. 
D) minimum price below which legal trades can be made.

Question 19

Exhibit 4-9
  
-Refer to Exhibit 4-9. Suppose that the government imposes a price ceiling at a price of $13. _________ units would be exchanged at the equilibrium price and ____________ units would be exchanged with the price ceiling in effect.

Accepted Answer

A) 150; 220 
B) 150; 150 
C) 110; 180 
D) 150; 90 
A) 150; 220 
B) 150; 150 
C) 110; 180 
D) 150; 90

Question 20

If the price of good X is $100 and the price of good Y is $25, it follows that the relative price of one unit of good X is _____________ unit(s) of good Y.

Accepted Answer

A) 1.00 
B) 4.00 
C) 0.25 
D) 1.33 
E) 0.75 
A) 1.00 
B) 4.00 
C) 0.25 
D) 1.33 
E) 0.75

Exam 4: Prices Free Controlled and Relative

Exhibit 4-5 -Refer to Exhibit 4-5. Suppose the government imposes a price ceiling at P = $0 for transplanted kidneys. The result will be a

There is currently a price ceiling in the market for transplanted kidneys, which has helped to create a shortage of transplanted kidneys.

In order for a price ceiling to have an impact on a market it must be set above the equilibrium price.

Exhibit 4-8 -Refer to Exhibit 4-8. Suppose that wheat producers lobby the government for a price floor and receive one. This price floor is set at PF. How many fewer units of wheat will be sold at the price floor than at the equilibrium price?

Exhibit 4-8 -Refer to Exhibit 4-8. Suppose that wheat producers lobby the government for a price floor and receive one. This price floor is set at PF. What is the change in the total surplus at the price floor, compared to at the equilibrium price?

If the current market price of good Z is below the equilibrium price of good Z

Exhibit 4-3 -Refer to Exhibit 4-3. Which of the following is true?

Exhibit 4-5 -Refer to Exhibit 4-5. If a free market were allowed in the transplanted kidney market, then the equilibrium price would be P2. The number of kidneys transplanted would increase by _________ compared to the number transplanted at a price ceiling of P= $0.

​ Exhibit 4-11 ​ -Refer to Exhibit 4-11. Suppose that the government imposes a price ceiling in the market for good ABC at a price of $4. How many fewer units would be exchanged at the price ceiling than would be exchanged if the market for good ABC were a free market?

The minimum wage is an example of a

Someone says, "Even though the equilibrium wage rate is $8 an hour in the unskilled labor market, if we impose a minimum wage of $10 an hour, no one currently working will lose his or her job." This person must believe that the

-Refer to Situation 4-1. An economist would have most likely predicted that once price controls were abolished in the spring of 1974,

Exhibit 4-1 -Refer to Exhibit 4-1. At the equilibrium price, ________ units of the good would be exchanged. With a price ceiling, _______ units of the good would be exchanged.

Exhibit 4-8 -Refer to Exhibit 4-8. If the wheat market is in competitive equilibrium, the consumers' surplus will equal

Buyers always prefer lower prices to higher prices.

If the minimum wage law sets a price floor that is below the equilibrium wage in the unskilled labor market, the minimum wage will create a shortage of unskilled labor.

A price floor is a government-mandated

Exhibit 4-9 -Refer to Exhibit 4-9. Suppose that the government imposes a price ceiling at a price of $13. _________ units would be exchanged at the equilibrium price and ____________ units would be exchanged with the price ceiling in effect.

If the price of good X is $100 and the price of good Y is $25, it follows that the relative price of one unit of good X is _____________ unit(s) of good Y.

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand Theory

Supply Demand and Price Applications

Macroeconomic Measurements Part I Prices and Unemployment

Macroeconomic Measurements Part II Gdp and Real Gdp

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self Regulating Economy

Keynesian Macroeconomics and Economic Instability a Critique of the Self Regulating Economy

Fiscal Policy and the Federal Budget

Money Banking and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth Resources Technology Ideas and Institutions

Debates in Macroeconomics Over the Role and Effects of Government

Elasticity

Consumer Choice and Behavioral Economics

Production and Costs

Perfect Competition

Monopoly

Monopolistic Competition Oligopoly and Game Theory

Government and Product Markets Antitrust and Regulation

Factor Markets With Emphasis on the Labor Market

Wages Unions and Labor

The Distribution of Income and Poverty

Interest Rent and Profit

Market Failure Externalities Public Goods and Asymmetric Information

Public Choice and Special Interest Group Politics

Building Theories to Explain Everyday Life From Observations to Questions to Theories to Predictions

International Trade

International Finance

The Economic Case for and Against Government Five Topics Considered

Stocks Bonds Futures and Options

Filters

Exhibit 4-8 -Refer to Exhibit 4-8. Suppose that wheat producers lobby the government for a price floor and receive one. This price floor is set at P_F. How many fewer units of wheat will be sold at the price floor than at the equilibrium price?

Exhibit 4-8 -Refer to Exhibit 4-8. Suppose that wheat producers lobby the government for a price floor and receive one. This price floor is set at P_F. What is the change in the total surplus at the price floor, compared to at the equilibrium price?

Exhibit 4-5 -Refer to Exhibit 4-5. If a free market were allowed in the transplanted kidney market, then the equilibrium price would be P₂. The number of kidneys transplanted would increase by _________ compared to the number transplanted at a price ceiling of P= $0.

Exhibit 4-11 -Refer to Exhibit 4-11. Suppose that the government imposes a price ceiling in the market for good ABC at a price of $4. How many fewer units would be exchanged at the price ceiling than would be exchanged if the market for good ABC were a free market?

Exhibit 4-1 -Refer to Exhibit 4-1. At the equilibrium price, __ units of the good would be exchanged. With a price ceiling, _ units of the good would be exchanged.

Exhibit 4-9 -Refer to Exhibit 4-9. Suppose that the government imposes a price ceiling at a price of $13. _ units would be exchanged at the equilibrium price and ____ units would be exchanged with the price ceiling in effect.