Question 1

Queuing is a way to ration goods

Accepted Answer

A) on a first-come, first-serve basis. 
B) through prices. 
C) through the use of political power. 
D) through markets. 
A) on a first-come, first-serve basis. 
B) through prices. 
C) through the use of political power. 
D) through markets.

Question 2

List prices on new cars do not change very often, so

Accepted Answer

A) the real price of cars is very inflexible. 
B) the prices of new cars can only be flexible if there are changes in the cost of materials. 
C) price flexibility is not an important feature in the auto market. 
D) price flexibility shows up primarily through the negotiations between buyers and sellers. 
A) the real price of cars is very inflexible. 
B) the prices of new cars can only be flexible if there are changes in the cost of materials. 
C) price flexibility is not an important feature in the auto market. 
D) price flexibility shows up primarily through the negotiations between buyers and sellers.

Question 3

Which of the following are ways to ration goods and services?

Accepted Answer

A) price 
B) physical force 
C) political power 
D) All of the above are correct. 
A) price 
B) physical force 
C) political power 
D) All of the above are correct.

Question 4

In a freely operating market system, queuing is most likely to occur when

Accepted Answer

A) selling necessities. 
B) the market clearing price increases. 
C) demand fluctuates unpredictably and quickly. 
D) demand increases gradually over time. 
A) selling necessities. 
B) the market clearing price increases. 
C) demand fluctuates unpredictably and quickly. 
D) demand increases gradually over time.

Question 5

Would it take longer for a labor market to move to a new equilibrium for house painters or architects? Why?

Accepted Answer

It would take longer for the market for

Question 6

If a price floor is set below the current market clearing price, then

Accepted Answer

A) a surplus must immediately occur. 
B) a shortage must immediately occur. 
C) there will be incentives for black markets to develop. 
D) quantity demanded will remain equal to quantity supplied at the current market clearing price. 
A) a surplus must immediately occur. 
B) a shortage must immediately occur. 
C) there will be incentives for black markets to develop. 
D) quantity demanded will remain equal to quantity supplied at the current market clearing price.

Question 7

If an excess quantity of labor demanded exists in a free market, there is a tendency for

Accepted Answer

A) quantity supplied to rise. 
B) the wage rate to fall. 
C) quantity demanded to fall. 
D) the wage rate to rise. 
A) quantity supplied to rise. 
B) the wage rate to fall. 
C) quantity demanded to fall. 
D) the wage rate to rise.

Question 8

Which of the following statements is most accurate regarding who benefits and loses from establishment of a minimum wage above the market clearing wage?

Accepted Answer

A) Individuals who obtain jobs benefit because they earn a higher wage, but some individuals lose because employers will not hire them at the minimum wage. 
B) All workers benefit equally from the establishment of the minimum wage because just as many workers as before remain employed, and all earn the higher minimum wage. 
C) All employers benefit equally from the establishment of the minimum wage because they are able to hire fewer workers at a lower wage. 
D) All employers lose because they must pay the higher minimum wage to the same number of employees as they did before the minimum wage was established. 
A) Individuals who obtain jobs benefit because they earn a higher wage, but some individuals lose because employers will not hire them at the minimum wage. 
B) All workers benefit equally from the establishment of the minimum wage because just as many workers as before remain employed, and all earn the higher minimum wage. 
C) All employers benefit equally from the establishment of the minimum wage because they are able to hire fewer workers at a lower wage. 
D) All employers lose because they must pay the higher minimum wage to the same number of employees as they did before the minimum wage was established.

Question 9

After an increase in the demand for construction workers, the market will attain its new long-run equilibrium faster if

Accepted Answer

A) wages are flexible. 
B) wages are inflexible, forcing new people to enter the market. 
C) unions restrict the number of new construction workers. 
D) people ignore the shortage in the short run. 
A) wages are flexible. 
B) wages are inflexible, forcing new people to enter the market. 
C) unions restrict the number of new construction workers. 
D) people ignore the shortage in the short run.

Question 10

An economic system in which relative prices change to reflect changes in supply and demand for different commodities is known as a

Accepted Answer

A) socialist system. 
B) communist system. 
C) queuing system. 
D) market system. 
A) socialist system. 
B) communist system. 
C) queuing system. 
D) market system.

Question 11

A black market

Accepted Answer

A) can arise when government imposes a price ceiling below the market clearing price. 
B) can arise when government imposes a price floor below the market clearing price. 
C) was created when after hours trading was permitted on some stock exchanges. 
D) is a market where products with outdated expiration dates are sold. 
A) can arise when government imposes a price ceiling below the market clearing price. 
B) can arise when government imposes a price floor below the market clearing price. 
C) was created when after hours trading was permitted on some stock exchanges. 
D) is a market where products with outdated expiration dates are sold.

Question 12

An import quota is an example of

Accepted Answer

A) a price ceiling. 
B) a price floor. 
C) a queuing device. 
D) a quantity restriction. 
A) a price ceiling. 
B) a price floor. 
C) a queuing device. 
D) a quantity restriction.

Question 13

There has recently been an increase in the price of dairy products used in the production of ice cream. High temperatures have also induced people to consume more ice cream. In the market for ice cream, the effects these changes will have on equilibrium price and quantity are:

Accepted Answer

A) price will increase, and quantity will decrease. 
B) price will increase, and the effect on quantity is indeterminate. 
C) price will decrease, and quantity will increase. 
D) price will decrease, and the effect on quantity is indeterminate. 
A) price will increase, and quantity will decrease. 
B) price will increase, and the effect on quantity is indeterminate. 
C) price will decrease, and quantity will increase. 
D) price will decrease, and the effect on quantity is indeterminate.

Question 14

An increase in the price of labor used to produce good Y will lead to

Accepted Answer

A) an increase in the market clearing price of good Y. 
B) an increase in the supply of good Y. 
C) a decrease in the demand for good Y. 
D) an increase in the demand for good Y. 
A) an increase in the market clearing price of good Y. 
B) an increase in the supply of good Y. 
C) a decrease in the demand for good Y. 
D) an increase in the demand for good Y.

Question 15

The signaling aspect of the market system refer to

Accepted Answer

A) legal requirements for contracts and exchanges. 
B) the price of the good to the consumer and producer. 
C) the voluntary character of the exchange. 
D) transaction costs of carrying out exchanges. 
A) legal requirements for contracts and exchanges. 
B) the price of the good to the consumer and producer. 
C) the voluntary character of the exchange. 
D) transaction costs of carrying out exchanges.

Question 16

-Refer to the above table. Suppose there are technological advances in the production of smartphones. The new equilibrium price will be

Accepted Answer

A) $275. 
B) $375. 
C) less than $275. 
D) between $275 and $375. 
A) $275. 
B) $375. 
C) less than $275. 
D) between $275 and $375.

Question 17

When rent controls establish a legal maximum rental rate below the equilibrium rental rate,

Accepted Answer

A) quantity demanded exceeds quantity supplied. 
B) quantity supplied exceeds quantity demanded. 
C) demand exceeds supply. 
D) supply exceeds demand. 
A) quantity demanded exceeds quantity supplied. 
B) quantity supplied exceeds quantity demanded. 
C) demand exceeds supply. 
D) supply exceeds demand.

Question 18

The minimum wage laws seek to

Accepted Answer

A) penalize employers that are not complying with labor laws. 
B) assure a minimum standard of payment for work. 
C) assure that all workers are paid the same wage rate. 
D) help teenagers find work. 
A) penalize employers that are not complying with labor laws. 
B) assure a minimum standard of payment for work. 
C) assure that all workers are paid the same wage rate. 
D) help teenagers find work.

Question 19

-When the government sets a maximum price that can be charged for a good or service, it creates

Accepted Answer

A) a price support. 
B) a price floor. 
C) a white market. 
D) a price ceiling. 
A) a price support. 
B) a price floor. 
C) a white market. 
D) a price ceiling.

Question 20

In the 1970s, the government placed price ceilings on gasoline prices. A shortage of gasoline occurred, and long lines formed at the pumps. Some gas stations required that in addition to paying the price on the pump you had to buy a blank will. The action of having to purchase the will in order to purchase gas is known as

Accepted Answer

A) a surplus. 
B) a price support. 
C) the price system. 
D) a black market. 
A) a surplus. 
B) a price support. 
C) the price system. 
D) a black market.

Queuing is a way to ration goods

List prices on new cars do not change very often, so

Which of the following are ways to ration goods and services?

In a freely operating market system, queuing is most likely to occur when

Would it take longer for a labor market to move to a new equilibrium for house painters or architects? Why?

If a price floor is set below the current market clearing price, then

If an excess quantity of labor demanded exists in a free market, there is a tendency for

Which of the following statements is most accurate regarding who benefits and loses from establishment of a minimum wage above the market clearing wage?

After an increase in the demand for construction workers, the market will attain its new long-run equilibrium faster if

An economic system in which relative prices change to reflect changes in supply and demand for different commodities is known as a

A black market

An import quota is an example of

There has recently been an increase in the price of dairy products used in the production of ice cream. High temperatures have also induced people to consume more ice cream. In the market for ice cream, the effects these changes will have on equilibrium price and quantity are:

An increase in the price of labor used to produce good Y will lead to

The signaling aspect of the market system refer to

-Refer to the above table. Suppose there are technological advances in the production of smartphones. The new equilibrium price will be

When rent controls establish a legal maximum rental rate below the equilibrium rental rate,

The minimum wage laws seek to

-When the government sets a maximum price that can be charged for a good or service, it creates

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Public Spending and Public Choice

Funding the Public Sector

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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Exam 4: Extensions of Demand and Supply Analysis

Queuing is a way to ration goods

List prices on new cars do not change very often, so

Which of the following are ways to ration goods and services?

In a freely operating market system, queuing is most likely to occur when

Would it take longer for a labor market to move to a new equilibrium for house painters or architects? Why?

If a price floor is set below the current market clearing price, then

If an excess quantity of labor demanded exists in a free market, there is a tendency for

Which of the following statements is most accurate regarding who benefits and loses from establishment of a minimum wage above the market clearing wage?

After an increase in the demand for construction workers, the market will attain its new long-run equilibrium faster if

An economic system in which relative prices change to reflect changes in supply and demand for different commodities is known as a

A black market

An import quota is an example of

There has recently been an increase in the price of dairy products used in the production of ice cream. High temperatures have also induced people to consume more ice cream. In the market for ice cream, the effects these changes will have on equilibrium price and quantity are:

An increase in the price of labor used to produce good Y will lead to

The signaling aspect of the market system refer to

-Refer to the above table. Suppose there are technological advances in the production of smartphones. The new equilibrium price will be

When rent controls establish a legal maximum rental rate below the equilibrium rental rate,

The minimum wage laws seek to

-When the government sets a maximum price that can be charged for a good or service, it creates

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Public Spending and Public Choice

Funding the Public Sector

Demand and Supply Elasticity

Consumer Choice

Rents, Profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters