Question 1

Price controls date back to

Accepted Answer

A) World War II. 
B) the U.S.Revolutionary War. 
C) thousands of years, at least back to ancient Babylonia. 
D) the 1970s. 
E) the last 20 years. 
A) World War II. 
B) the U.S.Revolutionary War. 
C) thousands of years, at least back to ancient Babylonia. 
D) the 1970s. 
E) the last 20 years.

Question 2

The following are the equations for the supply and demand curves in the market for weezils:     where Qd is the quantity demanded, Qs is the quantity supplied, and P is the price per weezil in dollars.
-To have an effect on the market, a price floor should be set at a price

Accepted Answer

A) above the equilibrium price. 
B) equal to the equilibrium price. 
C) below the equilibrium price. 
D) at any price on the supply curve. 
A) above the equilibrium price. 
B) equal to the equilibrium price. 
C) below the equilibrium price. 
D) at any price on the supply curve.

Question 3

A severe freeze has damaged the Florida orange crop.The effect on the market for oranges will be a left shift of

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 right shift in the demand curve, and the outcome will be 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 right shift in the demand curve, and the outcome will be a higher price

Question 4

The mechanism of supply and demand is

Accepted Answer

A) a fundamental tool in both microeconomics and macroeconomics. 
B) the only real "law" of economics. 
C) a fundamental tool only in microeconomics. 
D) a fundamental tool only in macroeconomics. 
A) a fundamental tool in both microeconomics and macroeconomics. 
B) the only real "law" of economics. 
C) a fundamental tool only in microeconomics. 
D) a fundamental tool only in macroeconomics.

Question 5

The following are the equations for the supply and demand curves in the market for weezils:     where Qd is the quantity demanded, Qs is the quantity supplied, and P is the price per weezil in dollars.
-Refer to Exhibit 4-1.If the government imposes a price floor of $4 a weezil, how many weezils will be sold?

Accepted Answer

A) 5 
B) 10 
C) 12 
D) 14 
A) 5 
B) 10 
C) 12 
D) 14

Question 6

Which of the following suggests that the "laws" of supply and demand are being disobeyed?

Accepted Answer

A) Outside forces disturbing an equilibrium 
B) Persistent shortages or surpluses 
C) The market never moving from an equilibrium 
D) "Other things" not always being equal 
A) Outside forces disturbing an equilibrium 
B) Persistent shortages or surpluses 
C) The market never moving from an equilibrium 
D) "Other things" not always being equal

Question 7

-A surplus will tend to occur at which price in Figure 4-21?

Accepted Answer

A) P1 
B) P2 
C) P3 
D) There will be no surplus at the prices shown. 
A) P1 
B) P2 
C) P3 
D) There will be no surplus at the prices shown.

Question 8

The U.S.government restricts the production of peanuts by limiting production licenses.By also prohibiting imports, the government maintains prices well above levels peanut farmers would obtain if supply were not restricted.This program has the same effect as a

Accepted Answer

A) price ceiling. 
B) price floor. 
C) opportunity cost. 
D) shortage. 
E) efficiency move. 
A) price ceiling. 
B) price floor. 
C) opportunity cost. 
D) shortage. 
E) efficiency move.

Question 9

A black market develops only when quantity demanded exceeds quantity supplied.

Accepted Answer

A) True 
 B)False

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

An increase in the price of gasoline shifts the demand for tires to the

Accepted Answer

A) left, because gasoline and tires are substitutes. 
B) left, because gasoline and tires are normally used together. 
C) right, because gasoline and tires are substitutes. 
D) right, because gasoline and tires are normally used together. 
A) left, because gasoline and tires are substitutes. 
B) left, because gasoline and tires are normally used together. 
C) right, because gasoline and tires are substitutes. 
D) right, because gasoline and tires are normally used together.

Question 12

A common misperception about consumer demand is that

Accepted Answer

A) demand depends on many other variables. 
B) price is a major determinant of quantity. 
C) it is a fixed amount. 
D) quantity cannot be determined in advance. 
E) All of these responses are correct. 
A) demand depends on many other variables. 
B) price is a major determinant of quantity. 
C) it is a fixed amount. 
D) quantity cannot be determined in advance. 
E) All of these responses are correct.

Question 13

When a demand curve is constructed, each point that demand curve represents

Accepted Answer

A) the demand for the product. 
B) the quantity demanded at that price. 
C) the amount that people want to buy. 
D) the amount people want to buy at different income levels. 
E) All of these responses are correct. 
A) the demand for the product. 
B) the quantity demanded at that price. 
C) the amount that people want to buy. 
D) the amount people want to buy at different income levels. 
E) All of these responses are correct.

Question 14

Figure 4-23  
-In Figure 4-23, which of the following movements would be caused by a change in income?

Accepted Answer

A) A to C 
B) C to A 
C) B to D 
D) B to A 
A) A to C 
B) C to A 
C) B to D 
D) B to A

Question 15

Which of the following is the correct way to describe equilibrium in a market?

Accepted Answer

A) At equilibrium, demand equals supply. 
B) At equilibrium, quantity demanded equals quantity supplied. 
C) At equilibrium, market forces are no longer at work. 
D) Equilibrium is a tendency, a state of perpetual motion. 
E) Equilibrium is the best combination of price and quantity. 
A) At equilibrium, demand equals supply. 
B) At equilibrium, quantity demanded equals quantity supplied. 
C) At equilibrium, market forces are no longer at work. 
D) Equilibrium is a tendency, a state of perpetual motion. 
E) Equilibrium is the best combination of price and quantity.

Question 16

Along a supply curve,

Accepted Answer

A) supply changes as price changes. 
B) quantity supplied changes as price changes. 
C) supply changes as technology changes. 
D) quantity supplied changes as technology changes. 
A) supply changes as price changes. 
B) quantity supplied changes as price changes. 
C) supply changes as technology changes. 
D) quantity supplied changes as technology changes.

Question 17

The following are the equations for the supply and demand curves in the market for weezils:     where Qd is the quantity demanded, Qs is the quantity supplied, and P is the price per weezil in dollars.
-Refer to Exhibit 4-1.According to the data given, when the market is in Equilibrium, how many weezils are sold?

Accepted Answer

A) 3 
B) 5 
C) 11 
D) 14 
A) 3 
B) 5 
C) 11 
D) 14

Question 18

An increase in price will decrease demand.

Accepted Answer

A) True 
 B)False

Question 19

A supply curve slopes upward because quantity supplied is higher when price is higher.

Accepted Answer

A) True 
 B)False

Question 20

"Demand" is a series of quantities demanded, one for each person in the market.

Accepted Answer

A) True 
 B)False

Exam 4: Supply and Demand: an Initial Look

Price controls date back to

The following are the equations for the supply and demand curves in the market for weezils: where Qd is the quantity demanded, Qs is the quantity supplied, and P is the price per weezil in dollars. -To have an effect on the market, a price floor should be set at a price

A severe freeze has damaged the Florida orange crop.The effect on the market for oranges will be a left shift of

The mechanism of supply and demand is

Which of the following suggests that the "laws" of supply and demand are being disobeyed?

-A surplus will tend to occur at which price in Figure 4-21?

The U.S.government restricts the production of peanuts by limiting production licenses.By also prohibiting imports, the government maintains prices well above levels peanut farmers would obtain if supply were not restricted.This program has the same effect as a

A black market develops only when quantity demanded exceeds quantity supplied.

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

An increase in the price of gasoline shifts the demand for tires to the

A common misperception about consumer demand is that

When a demand curve is constructed, each point that demand curve represents

Figure 4-23 -In Figure 4-23, which of the following movements would be caused by a change in income?

Which of the following is the correct way to describe equilibrium in a market?

Along a supply curve,

An increase in price will decrease demand.

A supply curve slopes upward because quantity supplied is higher when price is higher.

"Demand" is a series of quantities demanded, one for each person in the market.

What Is Economics

The Economony: 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

The Financial Markets and the Economy: the Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

The Case for Free Markets: the Price System

Monopoly

Between Competition and Monopoly

Limiting Market Power: Antitrust and Regulation

The Shortcomings of Free Markets

The Economics of the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

An Introduction to Macroeconomics

The Goals of Macroeconomic Policy

Economic Growth: Theory and Policy

Aggregate Demand and the Powerful Consumer

Demand-Side Equilibrium: Unemployment or Inflation

Bringing in the Supply Side: Unemployment and Inflation

Managing Aggregate Demand: Fiscal Policy

Money and the Banking System

Monetary Policy: Conventional and Unconventional

The Financial Crisis and the Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits in the Short and Long Run

The Trade-Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System: Order or Disorder

Exchange Rates and the Macroeconomy

Contemporary Issues in the Useconomy

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