Question 1

Which of the following will decrease the amount of a good that is traded in the market?

Accepted Answer

A)  price floors and price ceilings 
B)  excise taxes,price floors,and subsidies 
C)  excise taxes 
D)  subsidies 
E)  price floors,price ceilings,and excise taxes 
A)  price floors and price ceilings 
B)  excise taxes,price floors,and subsidies 
C)  excise taxes 
D)  subsidies 
E)  price floors,price ceilings,and excise taxes E

Question 2

A price floor on corn would have the effect of

Accepted Answer

A)  creating a surplus regardless of the level at which the price floor is set 
B)  creating a surplus supply when the floor is above the equilibrium price 
C)  creating a shortage when the price floor is set below the equilibrium price 
D)  creating a shortage regardless of where the price floor is set 
E)  ensuring a more equitable distribution of the good among consumers 
A)  creating a surplus regardless of the level at which the price floor is set 
B)  creating a surplus supply when the floor is above the equilibrium price 
C)  creating a shortage when the price floor is set below the equilibrium price 
D)  creating a shortage regardless of where the price floor is set 
E)  ensuring a more equitable distribution of the good among consumers B

Question 3

When the minimum wage is set above the equilibrium market wage,

Accepted Answer

A)  there will be a shortage of labor at the minimum wage 
B)  it will have no effect on the quantity of labor employed 
C)  the unemployment rate will rise 
D)  the quality of the labor force will increase 
E)  the unemployment rate will fall 
A)  there will be a shortage of labor at the minimum wage 
B)  it will have no effect on the quantity of labor employed 
C)  the unemployment rate will rise 
D)  the quality of the labor force will increase 
E)  the unemployment rate will fall C

Question 4

If the government thinks the price that a consumer has to pay for a good is too low,then which of the following would solve this problem?

Accepted Answer

A)  a price ceiling or an excise tax 
B)  a price floor or an excise tax 
C)  a price ceiling or a subsidy 
D)  a price floor or a subsidy 
E)  none of the above will lower the price a consumer has to pay for a good 
A)  a price ceiling or an excise tax 
B)  a price floor or an excise tax 
C)  a price ceiling or a subsidy 
D)  a price floor or a subsidy 
E)  none of the above will lower the price a consumer has to pay for a good

Question 5

If an excise tax is imposed on shoes,

Accepted Answer

A)  government tax revenue will fall 
B)  the market price of shoes will decrease 
C)  the supply curve will shift downward 
D)  the equilibrium quantity demanded will decrease 
E)  the equilibrium quantity supplied will increase 
A)  government tax revenue will fall 
B)  the market price of shoes will decrease 
C)  the supply curve will shift downward 
D)  the equilibrium quantity demanded will decrease 
E)  the equilibrium quantity supplied will increase

Question 6

-In Figure 4-5,at a temporary price of $4,

Accepted Answer

A)  all of the following occur 
B)  a surplus occurs 
C)  the supply curve will shift leftward 
D)  the demand curve will shift rightward 
E)  equilibrium will eventually occur at approximately $3.50 
A)  all of the following occur 
B)  a surplus occurs 
C)  the supply curve will shift leftward 
D)  the demand curve will shift rightward 
E)  equilibrium will eventually occur at approximately $3.50

Question 7

Nancy buys a $150,000 home using $30,000 of her own money and gets a mortgage for the remaining $120,000.If the price of the house increases 5%,what will Nancy's capital gain be?

Accepted Answer

A)  $30,000 
B)  $31,500 
C)  $35,000 
D)  $37,500 
E)  $45,550 
A)  $30,000 
B)  $31,500 
C)  $35,000 
D)  $37,500 
E)  $45,550

Question 8

All of the following are examples of stock variables except one.Which one?

Accepted Answer

A)  The amount of currency in circulation 
B)  The amount of money earned each week 
C)  The amount of money needed to construct a new building 
D)  The amount of money in a person's savings account 
E)  The amount of money at the Fed 
A)  The amount of currency in circulation 
B)  The amount of money earned each week 
C)  The amount of money needed to construct a new building 
D)  The amount of money in a person's savings account 
E)  The amount of money at the Fed

Question 9

A price ceiling will increase the amount that is traded in the market while a price floor will reduce the amount that is traded in the market

Accepted Answer

A) True 
 B)False

Question 10

Which of the following might explain why the government would create a price ceiling for a certain good?

Accepted Answer

A)  The equilibrium price that would result in the market would be considered too high 
B)  The equilibrium price that would result in the market would be considered too low 
C)  The equilibrium quantity that would result in the market would be considered too high 
D)  The equilibrium quantity that would result in the market would be considered too low 
E)  The government never has a reason to create price floors or price ceilings 
A)  The equilibrium price that would result in the market would be considered too high 
B)  The equilibrium price that would result in the market would be considered too low 
C)  The equilibrium quantity that would result in the market would be considered too high 
D)  The equilibrium quantity that would result in the market would be considered too low 
E)  The government never has a reason to create price floors or price ceilings

Question 11

If an excise tax is imposed on automobiles,

Accepted Answer

A)  the demand curve will shift upward and the market price will increase 
B)  the supply curve will shift downward and the market price will increase 
C)  the supply curve will shift upward and the market price will increase 
D)  the equilibrium quantity supplied will increase 
E)  the equilibrium quantity demanded will increase 
A)  the demand curve will shift upward and the market price will increase 
B)  the supply curve will shift downward and the market price will increase 
C)  the supply curve will shift upward and the market price will increase 
D)  the equilibrium quantity supplied will increase 
E)  the equilibrium quantity demanded will increase

Question 12

Within the context of the housing market,what does MBS stand for?

Accepted Answer

A)  Multi-Banking System 
B)  Mortgage Backed Security 
C)  Mortgage Bubble System 
D)  Mixed Bracket Securities 
A)  Multi-Banking System 
B)  Mortgage Backed Security 
C)  Mortgage Bubble System 
D)  Mixed Bracket Securities

Question 13

Gary buys a house for $200,000 using $10,000 of his own money and gets a mortgage for the remaining $190,000.If the value of the house increases 7%,what will be the percentage increase in Gary's investment?

Accepted Answer

A)  25% 
B)  7% 
C)  14% 
D)  70% 
E)  140% 
A)  25% 
B)  7% 
C)  14% 
D)  70% 
E)  140%

Question 14

Which of the following might explain why the government would create a price floor for a certain good?

Accepted Answer

A)  The equilibrium price that would result in the market would be considered too high 
B)  The equilibrium price that would result in the market would be considered too low 
C)  The equilibrium quantity that would result in the market would be considered too high 
D)  The equilibrium quantity that would result in the market would be considered too low 
E)  The market will never achieve equilibrium on its own 
A)  The equilibrium price that would result in the market would be considered too high 
B)  The equilibrium price that would result in the market would be considered too low 
C)  The equilibrium quantity that would result in the market would be considered too high 
D)  The equilibrium quantity that would result in the market would be considered too low 
E)  The market will never achieve equilibrium on its own

Question 15

-Figure 4-4 depicts a market in which the government has imposed a price floor of $5.00 per unit.To maintain the price floor,the government should

Accepted Answer

A)  buy 200 units of the good 
B)  sell 200 units of the good 
C)  buy 700 units of the good 
D)  sell 700 units of the good 
E)  buy 500 units of the good 
A)  buy 200 units of the good 
B)  sell 200 units of the good 
C)  buy 700 units of the good 
D)  sell 700 units of the good 
E)  buy 500 units of the good

Question 16

When analyzing the housing market,the supply curve

Accepted Answer

A)  will be upward sloping because the higher the price of a house the more that will exist 
B)  will be horizontal to illustrate that the supply of housing is a stock variable 
C)  will be downward sloping;that is what went wrong with the housing market 
D)  will be vertical to illustrate that the supply of housing is a stock variable 
E)  could be horizontal,vertical or upward sloping depending upon the housing market in question 
A)  will be upward sloping because the higher the price of a house the more that will exist 
B)  will be horizontal to illustrate that the supply of housing is a stock variable 
C)  will be downward sloping;that is what went wrong with the housing market 
D)  will be vertical to illustrate that the supply of housing is a stock variable 
E)  could be horizontal,vertical or upward sloping depending upon the housing market in question

Question 17

Rent control is an example of a price ceiling.Which of the following problems must be addressed under a rent control program?

Accepted Answer

A)  what to do with the surplus of rental units 
B)  how to subsidize renters so that they can afford to pay the higher rents 
C)  how to decrease the quantity of rental units to the equilibrium level 
D)  whether the opportunity cost of rental units equals the competitive market price 
E)  how to allocate scarce rental units 
A)  what to do with the surplus of rental units 
B)  how to subsidize renters so that they can afford to pay the higher rents 
C)  how to decrease the quantity of rental units to the equilibrium level 
D)  whether the opportunity cost of rental units equals the competitive market price 
E)  how to allocate scarce rental units

Question 18

In what way is the result of an excise tax imposed on either demanders or suppliers similar to the result of a price floor?

Accepted Answer

A)  The amount that consumers pay for the good will be less than they previously paid 
B)  The amount of the good that will be traded in the market will be greater than previously traded 
C)  both price floors and excise taxes create excess demand 
D)  The amount that consumers pay for the good will be greater than they previously paid 
E)  Both price floors and excise taxes create excess supply 
A)  The amount that consumers pay for the good will be less than they previously paid 
B)  The amount of the good that will be traded in the market will be greater than previously traded 
C)  both price floors and excise taxes create excess demand 
D)  The amount that consumers pay for the good will be greater than they previously paid 
E)  Both price floors and excise taxes create excess supply

Question 19

If an excise tax is imposed on steak,

Accepted Answer

A)  the government's tax revenue will decrease 
B)  the government's tax revenue will increase 
C)  the amount of steak produced and sold will increase 
D)  the market price of steak will decrease 
E)  the market price will rise but the market quantity will be unaffected 
A)  the government's tax revenue will decrease 
B)  the government's tax revenue will increase 
C)  the amount of steak produced and sold will increase 
D)  the market price of steak will decrease 
E)  the market price will rise but the market quantity will be unaffected

Question 20

A $10,000 federal subsidy per student in higher education would benefit

Accepted Answer

A)  a student by exactly $10,000 
B)  a university by exactly 
C)  the student and the university in such a way that they would split the $10,000. 
D)  the student and the university in such a way that they would each get $10,000. 
A)  a student by exactly $10,000 
B)  a university by exactly 
C)  the student and the university in such a way that they would split the $10,000. 
D)  the student and the university in such a way that they would each get $10,000.

Which of the following will decrease the amount of a good that is traded in the market?

A price floor on corn would have the effect of

When the minimum wage is set above the equilibrium market wage,

If the government thinks the price that a consumer has to pay for a good is too low,then which of the following would solve this problem?

If an excise tax is imposed on shoes,

-In Figure 4-5,at a temporary price of $4,

Nancy buys a $150,000 home using $30,000 of her own money and gets a mortgage for the remaining $120,000.If the price of the house increases 5%,what will Nancy's capital gain be?

All of the following are examples of stock variables except one.Which one?

A price ceiling will increase the amount that is traded in the market while a price floor will reduce the amount that is traded in the market

Which of the following might explain why the government would create a price ceiling for a certain good?

If an excise tax is imposed on automobiles,

Within the context of the housing market,what does MBS stand for?

Gary buys a house for $200,000 using $10,000 of his own money and gets a mortgage for the remaining $190,000.If the value of the house increases 7%,what will be the percentage increase in Gary's investment?

Which of the following might explain why the government would create a price floor for a certain good?

-Figure 4-4 depicts a market in which the government has imposed a price floor of $5.00 per unit.To maintain the price floor,the government should

When analyzing the housing market,the supply curve

Rent control is an example of a price ceiling.Which of the following problems must be addressed under a rent control program?

In what way is the result of an excise tax imposed on either demanders or suppliers similar to the result of a price floor?

If an excise tax is imposed on steak,

A $10,000 federal subsidy per student in higher education would benefit

What is Economics?

Scarcity, Choice, and Economic Systems

Supply and Demand

What Macroeconomics Tries to Explain

Production, Income, and Employment

The Price Level and Inflation

The Classical Long run Model

Economic Growth and Rising Living Standards

Economic Fluctuations

The Short-run Macro Model

Fiscal Policy

Money, Banks, and the Federal Reserve

The Money Market and Monetary Policy

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Filters

Exam 4: Working With Supply and Demand

Which of the following will decrease the amount of a good that is traded in the market?

A price floor on corn would have the effect of

When the minimum wage is set above the equilibrium market wage,

If the government thinks the price that a consumer has to pay for a good is too low,then which of the following would solve this problem?

If an excise tax is imposed on shoes,

-In Figure 4-5,at a temporary price of $4,

Nancy buys a $150,000 home using $30,000 of her own money and gets a mortgage for the remaining $120,000.If the price of the house increases 5%,what will Nancy's capital gain be?

All of the following are examples of stock variables except one.Which one?

A price ceiling will increase the amount that is traded in the market while a price floor will reduce the amount that is traded in the market

Which of the following might explain why the government would create a price ceiling for a certain good?

If an excise tax is imposed on automobiles,

Within the context of the housing market,what does MBS stand for?

Gary buys a house for $200,000 using $10,000 of his own money and gets a mortgage for the remaining $190,000.If the value of the house increases 7%,what will be the percentage increase in Gary's investment?

Which of the following might explain why the government would create a price floor for a certain good?

-Figure 4-4 depicts a market in which the government has imposed a price floor of $5.00 per unit.To maintain the price floor,the government should

When analyzing the housing market,the supply curve

Rent control is an example of a price ceiling.Which of the following problems must be addressed under a rent control program?

In what way is the result of an excise tax imposed on either demanders or suppliers similar to the result of a price floor?

If an excise tax is imposed on steak,

A $10,000 federal subsidy per student in higher education would benefit

What is Economics?

Scarcity, Choice, and Economic Systems

Supply and Demand

What Macroeconomics Tries to Explain

Production, Income, and Employment

The Price Level and Inflation

The Classical Long run Model

Economic Growth and Rising Living Standards

Economic Fluctuations

The Short-run Macro Model

Fiscal Policy

Money, Banks, and the Federal Reserve

The Money Market and Monetary Policy

Aggregate Demand and Aggregate Supply

Inflation and Monetary Policy

Exchange Rates and Macroeconomic Policy

Filters