Exam 4: Extensions of Demand and Supply Analysis

Prices provide the rationing function best when

-Refer to the above figure. If a price floor of $5 was set,

An effective price ceiling occurs when

Price floors in agriculture lead to

-According to the above figure, the market clearing wage rate is

An example of a black market is

An import quota is a limit on the

"Scarcity implies that some way of rationing goods must be found." Explain what this statement means. How is this rationing done?

-Refer to the above figure. Suppose the government imposes a minimum wage rate of $20.00 per hour. This will likely result in

What would happen in the market for rental housing in your community if the local government legally mandated rents that were below the market clearing price?

As demand for MP3 music downloads increases, other things being equal, we can expect

Suppose a price ceiling is set above the equilibrium price. Now suppose that policy makers decide to raise the price ceiling. This increase in the price ceiling will cause which of the following to occur?

What are the terms of exchange and how are these terms related to the price?

-Government policies such as price controls, rent controls, and quantity restrictions have the effect of

In a market system, which component conveys information about what is relatively scarce and what is relatively abundant?

Suppose there is a simultaneous increase in the demand for wheat and increase in the supply of wheat. Which of the following will occur as a result of these simultaneous events?

-Refer to the above figure. A minimum wage has been set at . The amount of unemployment is

Garbanzo Beans -Which of the following will likely occur when price floors in agriculture are implemented?

-Refer to the above figure. Suppose the demand curve shifts from DA to DB, while the supply curve remains at SA. Which of the following statements is FALSE?

When supply increases and at the same time demand decreases, we