Exam 4: Extensions of Demand and Supply Analysis

The way we know what commodities are relatively scarce or abundant is through

In 2010, a British Petroleum oil rig exploded in the Gulf of Mexico. The explosion resulted in a major oil spill and a decrease in the supply of oil. At the same time, the average price of gasoline decreased. Which of the following best explains the decrease in the price of gasoline?

Which of the following is NOT a predictable result of a price ceiling set below the market clearing price?

The decrease in the price of gasoline to a national average of less than $3.20 during the summer of 2012 was most likely a result of

Price controls may be thought of as

Price floors are designed to

An increase in supply causes

The gains from trade within a price system is

With respect to the market clearing price and the equilibrium quantity of good X, increases in the demand for and the supply of good X will definitely

Holding supply constant, an increase in demand leads to

Relative scarcities are indicated by

An increase in the equilibrium quantity of good X can be caused by

An effective government imposed price ceiling will result

All of the following reduce the transaction costs for consumers EXCEPT

The effect of a legal minimum wage set above the equilibrium wage rate is

Garbanzo Beans -If the federal government sets a minimum price for wheat at $5.00 per bushel when the equilibrium price is $4.50, then

A supply restriction that restricts the amount of a good that can be imported is a(n)

Excess quantity demanded may result from

The effect of legislation establishing a minimum wage above the market clearing wage is

The U.S. government imposes import quotas on many agricultural products, especially products that receive price supports. Offer an economic explanation for this.