Question 1

Black markets can generally be eliminated when price ceilings are enacted.

Accepted Answer

A) True 
 B)False

Question 2

Changes in the size of an industry may cause supply to shift.

Accepted Answer

A) True 
 B)False

Question 3

At price P  3  in Figure 4-21, what will tend to happen?

Accepted Answer

A) There will be a shortage, and the price will fall. 
B) There will be a shortage, and the price will rise. 
C) There will be a surplus, and the price will rise. 
D) There will be a surplus, and the price will fall. 
E) Equilibrium will occur in the market. 
A) There will be a shortage, and the price will fall. 
B) There will be a shortage, and the price will rise. 
C) There will be a surplus, and the price will rise. 
D) There will be a surplus, and the price will fall. 
E) Equilibrium will occur in the market.

Question 4

Governments of market-oriented economies never tamper with the price mechanism.

Accepted Answer

A) True 
 B)False

Question 5

Since rent controls have been in effect in New York City, apartments have been more plentiful.

Accepted Answer

A) True 
 B)False

Question 6

A demand curve shows the relationship between price and quantity demanded only so long as all other things are held constant.

Accepted Answer

A) True 
 B)False

Question 7

Economists use the mechanism of supply and demand to study

Accepted Answer

A) inflation. 
B) unemployment. 
C) environmental protection. 
D) All of these responses are correct. 
A) inflation. 
B) unemployment. 
C) environmental protection. 
D) All of these responses are correct.

Question 8

An increase in price will increase supply.

Accepted Answer

A) True 
 B)False

Question 9

The position of a demand curve is unaffected by changes in the price of the good.

Accepted Answer

A) True 
 B)False

Question 10

The supply curve for a good can be thought of as

Accepted Answer

A) a graphical display of "market potential." 
B) a graphical representation of the data in a supply schedule. 
C) showing the maximum quantities that firms are able to produce. 
D) a forecasting tool. 
E) All of these responses are correct. 
A) a graphical display of "market potential." 
B) a graphical representation of the data in a supply schedule. 
C) showing the maximum quantities that firms are able to produce. 
D) a forecasting tool. 
E) All of these responses are correct.

Question 11

If the price of a good increases, the quantity supplied will

Accepted Answer

A) increase. 
B) decrease. 
C) not change. 
D) quantity supplied is unchanged, but the supply will increase. 
A) increase. 
B) decrease. 
C) not change. 
D) quantity supplied is unchanged, but the supply will increase.

Question 12

If both the supply and demand curves shift to the left, then we can conclude that there will be

Accepted Answer

A) an increase in the equilibrium quantity sold. 
B) a decrease in the equilibrium quantity sold. 
C) an increase in the equilibrium price. 
D) a decrease in the equilibrium price. 
A) an increase in the equilibrium quantity sold. 
B) a decrease in the equilibrium quantity sold. 
C) an increase in the equilibrium price. 
D) a decrease in the equilibrium price.

Question 13

Figure 4-4  
 
-​Assume that Figure 4-4 shows demand for skirt steak, which is used to make fajitas. A decrease in the price of tortillas will change demand from

Accepted Answer

A) D  1  to D  2  . 
B) D  2  to D  1  
C) D  3  to D  2  . 
D) D  3  to D  1  . 
A) D  1  to D  2  . 
B) D  2  to D  1  
C) D  3  to D  2  . 
D) D  3  to D  1  .

Question 14

The rising minimum wage allegedly has reduced the quantity demanded of teenage labor. However, demographics slightly reduced the supply of teenage labor. The U.S. Department of Labor reported that teenage unemployment is an increasing problem. Which graph in Figure 4-10 is consistent with these facts?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 15

The government of Economica announces that it will purchase its farmers' surplus of milk. From this announcement, you can infer that Economica has a

Accepted Answer

A) free market for milk. 
B) price ceiling above the equilibrium price for milk. 
C) price floor above the equilibrium price for milk. 
D) price floor below the equilibrium price for milk. 
A) free market for milk. 
B) price ceiling above the equilibrium price for milk. 
C) price floor above the equilibrium price for milk. 
D) price floor below the equilibrium price for milk.

Question 16

When used in a professional or technical sense, the law of supply and demand refers to

Accepted Answer

A) some vague influences on economic affairs. 
B) the fact that prices go up when commodities are scarce. 
C) the market forces that show how prices and quantities are determined. 
D) the controls that regulate the amount of scarce goods that each consumer can purchase. 
A) some vague influences on economic affairs. 
B) the fact that prices go up when commodities are scarce. 
C) the market forces that show how prices and quantities are determined. 
D) the controls that regulate the amount of scarce goods that each consumer can purchase.

Question 17

The imposition of price ceilings on a market often results in

Accepted Answer

A) an increase in investment in the industry. 
B) a persistent surplus in the market. 
C) the diversion of income toward black-market suppliers. 
D) lower prices being offered on the black market. 
A) an increase in investment in the industry. 
B) a persistent surplus in the market. 
C) the diversion of income toward black-market suppliers. 
D) lower prices being offered on the black market.

Question 18

Which of the following factors are held constant for a given demand curve for a good?

Accepted Answer

A) The price of the good 
B) The technology used to produce the good 
C) The supply of the good 
D) Consumer incomes and the prices of other goods 
A) The price of the good 
B) The technology used to produce the good 
C) The supply of the good 
D) Consumer incomes and the prices of other goods

Question 19

When the price per ticket is P*, there are empty seats at a university's basketball arena. From this, we can conclude that

Accepted Answer

A) P* is greater than the equilibrium price. 
B) P* is less than the equilibrium price. 
C) P* is the equilibrium price. 
D) it's not possible to determine anything about the equilibrium price with this information. 
A) P* is greater than the equilibrium price. 
B) P* is less than the equilibrium price. 
C) P* is the equilibrium price. 
D) it's not possible to determine anything about the equilibrium price with this information.

Question 20

The wage rate. is the price of a unit of labor. What happens to the supply of labor if the wage rate increases?

Accepted Answer

A) It increases. 
B) It decreases. 
C) It does not change. 
D) Uncertain-economic theory has no answer to this question. 
A) It increases. 
B) It decreases. 
C) It does not change. 
D) Uncertain-economic theory has no answer to this question.

Exam 4: Supply and Demand: an Initial Look

Black markets can generally be eliminated when price ceilings are enacted.

Changes in the size of an industry may cause supply to shift.

At price P 3 in Figure 4-21, what will tend to happen?

Governments of market-oriented economies never tamper with the price mechanism.

Since rent controls have been in effect in New York City, apartments have been more plentiful.

A demand curve shows the relationship between price and quantity demanded only so long as all other things are held constant.

Economists use the mechanism of supply and demand to study

An increase in price will increase supply.

The position of a demand curve is unaffected by changes in the price of the good.

The supply curve for a good can be thought of as

If the price of a good increases, the quantity supplied will

If both the supply and demand curves shift to the left, then we can conclude that there will be

Figure 4-4 -​Assume that Figure 4-4 shows demand for skirt steak, which is used to make fajitas. A decrease in the price of tortillas will change demand from

The government of Economica announces that it will purchase its farmers' surplus of milk. From this announcement, you can infer that Economica has a

When used in a professional or technical sense, the law of supply and demand refers to

The imposition of price ceilings on a market often results in

Which of the following factors are held constant for a given demand curve for a good?

When the price per ticket is P*, there are empty seats at a university's basketball arena. From this, we can conclude that

The wage rate. is the price of a unit of labor. What happens to the supply of labor if the wage rate increases?

What Is Economics

The Economy: 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

Externalities, Externaliteis, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: the Human Inputs

Poverty, Inequality, and Discrimination

International Trade and Comparative Advantage

Contemporary Issues in the Us Economy

Filters

At price P ₃ in Figure 4-21, what will tend to happen?

Figure 4-4 -Assume that Figure 4-4 shows demand for skirt steak, which is used to make fajitas. A decrease in the price of tortillas will change demand from