Question 1

-In Figure 4-2,if the government imposes a price ceiling of $2,the result will be

Accepted Answer

A)  equilibrium 
B)  excess supply 
C)  no different than before the price ceiling is imposed 
D)  excess demand 
E)  the demand shifts leftward and supply shifts rightward 
A)  equilibrium 
B)  excess supply 
C)  no different than before the price ceiling is imposed 
D)  excess demand 
E)  the demand shifts leftward and supply shifts rightward

Question 2

Which of the following is not true about the housing market?

Accepted Answer

A)  The price of housing will increase or decrease in order to achieve an equilibrium 
B)  An increase in the demand for housing will cause an increase in the quantity supplied of housing 
C)  When the demand for housing increases,the price of housing will increase but the quantity supplied will not increase in the short run 
D)  The housing market is a unique market because most people had to borrow money to buy their homes 
E)  The only way to increase the supply of housing is to build more houses 
A)  The price of housing will increase or decrease in order to achieve an equilibrium 
B)  An increase in the demand for housing will cause an increase in the quantity supplied of housing 
C)  When the demand for housing increases,the price of housing will increase but the quantity supplied will not increase in the short run 
D)  The housing market is a unique market because most people had to borrow money to buy their homes 
E)  The only way to increase the supply of housing is to build more houses

Question 3

If the government thinks the price that a consumer has to pay for a good is too high,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 4

Price ceilings are primarily targeted to help __________,while price floors generally benefit __________.

Accepted Answer

A)  producers;no one 
B)  increase tax revenue for governments;producers 
C)  increase tax revenue for governments;consumers 
D)  producers;consumers 
E)  consumers;producers 
A)  producers;no one 
B)  increase tax revenue for governments;producers 
C)  increase tax revenue for governments;consumers 
D)  producers;consumers 
E)  consumers;producers

Question 5

If an excise tax is imposed on shirts,

Accepted Answer

A)  the number of shirts produced will exceed the number demanded 
B)  the number of shirts demanded will exceed the number supplied 
C)  the equilibrium market price will decrease 
D)  the amount consumers pay for each shirt will decrease 
E)  the net revenue producers receive from each shirt will decrease 
A)  the number of shirts produced will exceed the number demanded 
B)  the number of shirts demanded will exceed the number supplied 
C)  the equilibrium market price will decrease 
D)  the amount consumers pay for each shirt will decrease 
E)  the net revenue producers receive from each shirt will decrease

Question 6

To say that the housing market is in equilibrium means that

Accepted Answer

A)  there are no vacant houses 
B)  the number of houses that are being constructed is equal to the housing stock 
C)  the number of houses that are currently empty is equal to the number of households currently looking to buy a house 
D)  the quantity demanded of houses is equal to the number of houses currently under construction 
E)  the number of houses that people want to own is equal to the housing stock 
A)  there are no vacant houses 
B)  the number of houses that are being constructed is equal to the housing stock 
C)  the number of houses that are currently empty is equal to the number of households currently looking to buy a house 
D)  the quantity demanded of houses is equal to the number of houses currently under construction 
E)  the number of houses that people want to own is equal to the housing stock

Question 7

Which of the following would be an example of a flow variable?

Accepted Answer

A)  The amount of money needed to buy a car 
B)  The amount of money a person has in her or her wallet 
C)  The amount of income a person earns each week 
D)  The amount of money a person has in a savings account 
E)  None of these are flow variables 
A)  The amount of money needed to buy a car 
B)  The amount of money a person has in her or her wallet 
C)  The amount of income a person earns each week 
D)  The amount of money a person has in a savings account 
E)  None of these are flow variables

Question 8

Suppose that a market is initially in equilibrium.Then the government imposes a price floor above the equilibrium price.Which of the following will occur in the absence of a black market?

Accepted Answer

A)  The market will remain in equilibrium. 
B)  The quantity sold will drop. 
C)  The quantity demanded will increase. 
D)  The quantity supplied will decrease. 
E)  An excess demand will develop. 
A)  The market will remain in equilibrium. 
B)  The quantity sold will drop. 
C)  The quantity demanded will increase. 
D)  The quantity supplied will decrease. 
E)  An excess demand will develop.

Question 9

$$\begin{array} { | c c c } 
\hline { \text { Fimure 4-3 } } \
\hline \text { Price } & \text { Quartity } & \text { Quartity } \
\text { Per Pair } & \text { Demarded } & \text { Supplied } \
\hline \$ 2 & 18 & 3 \
\$ 4 & 14 & 4 \
\$ 6 & 10 & 5 \
\$ 8 & 6 & 6 \
\$ 10 & 2 & 8 \
\hline
\end{array}$$
-Figure 4-3 shows the supply and demand for socks.If a price floor of $6 is imposed,the quantity of socks actually purchased will be

Accepted Answer

A)  10 pairs 
B)  5 pairs 
C)  6 pairs 
D)  15 pairs 
E)  13 pairs 
A)  10 pairs 
B)  5 pairs 
C)  6 pairs 
D)  15 pairs 
E)  13 pairs

Question 10

Price floors and price ceilings

Accepted Answer

A)  lead to the same prices and quantities that would be found in a competitive market 
B)  lead to technical efficiency 
C)  cause the demand curve to shift to the left 
D)  usually result from government intervention 
E)  cause the supply curve to shift to the right 
A)  lead to the same prices and quantities that would be found in a competitive market 
B)  lead to technical efficiency 
C)  cause the demand curve to shift to the left 
D)  usually result from government intervention 
E)  cause the supply curve to shift to the right

Question 11

Whether a subsidy for a certain good is given to a demander or supplier is irrelevant because

Accepted Answer

A)  in either case,the price that the demander has to pay will decrease;while the price the supplier receives will increase 
B)  in either case,the price that the demander has to pay will increase;while the price the supplier receives will decrease 
C)  either situation will create excess demand 
D)  either situation will create excess supply 
E)  none of these are correct 
A)  in either case,the price that the demander has to pay will decrease;while the price the supplier receives will increase 
B)  in either case,the price that the demander has to pay will increase;while the price the supplier receives will decrease 
C)  either situation will create excess demand 
D)  either situation will create excess supply 
E)  none of these are correct

Question 12

After an excise tax is imposed on a good or service,

Accepted Answer

A)  the equilibrium price and quantity are unchanged 
B)  firms must charge a higher price for any particular quantity 
C)  firms must charge a lower price for any particular quantity 
D)  the equilibrium price and quantity will both increase 
E)  the equilibrium price and quantity will both decrease 
A)  the equilibrium price and quantity are unchanged 
B)  firms must charge a higher price for any particular quantity 
C)  firms must charge a lower price for any particular quantity 
D)  the equilibrium price and quantity will both increase 
E)  the equilibrium price and quantity will both decrease

Question 13

$$\begin{array} { | c c c | } 
\hline  { \text { Fimure 4-1 } } \
\hline \text { Price } & \begin{array} { r } 
\text { Quartity } \
\text { Per Pair }
\end{array} & \begin{array} { c } 
\text { Quartity } \
\text { Derpplied }
\end{array} \
\hline \$ 2 & 18 & 3 \
\$ 4 & 14 & 4 \
\$ 6 & 10 & 5 \
\$ 8 & 6 & 6 \
\$ 10 & 2 & 8 \
\hline
\end{array}$$
-Figure 4-1 shows the supply and demand for socks.If a price ceiling of $10 per pair is imposed by the government,the number of pairs actually purchased will be

Accepted Answer

A)  2 pairs 
B)  8 pairs 
C)  5 pairs 
D)  1 pair 
E)  6 pairs 
A)  2 pairs 
B)  8 pairs 
C)  5 pairs 
D)  1 pair 
E)  6 pairs

Question 14

A flow variable

Accepted Answer

A)  measures a process that takes place over a period of time 
B)  is often used to measure the amount of wealth that a household has 
C)  is related to the supply and demand of water 
D)  measures a quantity in existence at a moment in time 
E)  is a definition unique to economics 
A)  measures a process that takes place over a period of time 
B)  is often used to measure the amount of wealth that a household has 
C)  is related to the supply and demand of water 
D)  measures a quantity in existence at a moment in time 
E)  is a definition unique to economics

Question 15

Both a price floor and a price ceiling will reduce that amount of a good that is traded in the market.

Accepted Answer

A) True 
 B)False

Question 16

$$\begin{array} { | c c c } 
\hline { \text { Fimure 4-3 } } \
\hline \text { Price } & \text { Quartity } & \text { Quartity } \
\text { Per Pair } & \text { Demarded } & \text { Supplied } \
\hline \$ 2 & 18 & 3 \
\$ 4 & 14 & 4 \
\$ 6 & 10 & 5 \
\$ 8 & 6 & 6 \
\$ 10 & 2 & 8 \
\hline
\end{array}$$
-Figure 4-3 shows the supply and demand for socks.If a price floor of $10 is imposed,the quantity of socks actually purchased will be

Accepted Answer

A)  6 pairs 
B)  10 pairs 
C)  2 pairs 
D)  8 pairs 
E)  1 pair 
A)  6 pairs 
B)  10 pairs 
C)  2 pairs 
D)  8 pairs 
E)  1 pair

Question 17

A government-imposed price ceiling set below the market's equilibrium price for a good will produce an excess supply of the good.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is an example of a stock variable?

Accepted Answer

A)  The amount of cereal in a person's pantry 
B)  The amount of cereal a person buys each week 
C)  The amount of cereal a child consumes each month 
D)  The amount of cereal produced each day 
E)  None of these are stock variables 
A)  The amount of cereal in a person's pantry 
B)  The amount of cereal a person buys each week 
C)  The amount of cereal a child consumes each month 
D)  The amount of cereal produced each day 
E)  None of these are stock variables

Question 19

Which of the following is not an example of a flow variable?

Accepted Answer

A)  The amount of income that a person earns each month 
B)  The amount of interest that a savings account earns each week 
C)  The amount of money in a savings account 
D)  The amount of taxes that a person pays each year 
E)  All of these are flow variables 
A)  The amount of income that a person earns each month 
B)  The amount of interest that a savings account earns each week 
C)  The amount of money in a savings account 
D)  The amount of taxes that a person pays each year 
E)  All of these are flow variables

Question 20

If an excise tax is imposed on a good or service,

Accepted Answer

A)  the supply curve shifts upward 
B)  the supply curve shifts downward 
C)  the price paid by consumers decreases 
D)  the net price received by sellers increases 
E)  the quantity produced and sold increases 
A)  the supply curve shifts upward 
B)  the supply curve shifts downward 
C)  the price paid by consumers decreases 
D)  the net price received by sellers increases 
E)  the quantity produced and sold increases

-In Figure 4-2,if the government imposes a price ceiling of $2,the result will be

Which of the following is not true about the housing market?

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

Price ceilings are primarily targeted to help ,while price floors generally benefit .

If an excise tax is imposed on shirts,

To say that the housing market is in equilibrium means that

Which of the following would be an example of a flow variable?

Suppose that a market is initially in equilibrium.Then the government imposes a price floor above the equilibrium price.Which of the following will occur in the absence of a black market?

Fimure 4-3 Price Quartity Quartity Per Pair Demarded Supplied \ 2 18 3 \ 4 14 4 \ 6 10 5 \ 8 6 6 \ 10 2 8 -Figure 4-3 shows the supply and demand for socks.If a price floor of $6 is imposed,the quantity of socks actually purchased will be

Price floors and price ceilings

Whether a subsidy for a certain good is given to a demander or supplier is irrelevant because

After an excise tax is imposed on a good or service,

Fimure 4-1 Price Quartity Per Pair Quartity Derpplied \ 2 18 3 \ 4 14 4 \ 6 10 5 \ 8 6 6 \ 10 2 8 -Figure 4-1 shows the supply and demand for socks.If a price ceiling of $10 per pair is imposed by the government,the number of pairs actually purchased will be

A flow variable

Both a price floor and a price ceiling will reduce that amount of a good that is traded in the market.

Fimure 4-3 Price Quartity Quartity Per Pair Demarded Supplied \ 2 18 3 \ 4 14 4 \ 6 10 5 \ 8 6 6 \ 10 2 8 -Figure 4-3 shows the supply and demand for socks.If a price floor of $10 is imposed,the quantity of socks actually purchased will be

A government-imposed price ceiling set below the market's equilibrium price for a good will produce an excess supply of the good.

Which of the following is an example of a stock variable?

Which of the following is not an example of a flow variable?

If an excise tax is imposed on a good or service,

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

-In Figure 4-2,if the government imposes a price ceiling of $2,the result will be

Which of the following is not true about the housing market?

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

Price ceilings are primarily targeted to help __________,while price floors generally benefit __________.

If an excise tax is imposed on shirts,

To say that the housing market is in equilibrium means that

Which of the following would be an example of a flow variable?

Suppose that a market is initially in equilibrium.Then the government imposes a price floor above the equilibrium price.Which of the following will occur in the absence of a black market?

Fimure 4-3 Price Quartity Quartity Per Pair Demarded Supplied \ 2 18 3 \ 4 14 4 \ 6 10 5 \ 8 6 6 \ 10 2 8 -Figure 4-3 shows the supply and demand for socks.If a price floor of $6 is imposed,the quantity of socks actually purchased will be

Price floors and price ceilings

Whether a subsidy for a certain good is given to a demander or supplier is irrelevant because

After an excise tax is imposed on a good or service,

Fimure 4-1 Price Quartity Per Pair Quartity Derpplied \ 2 18 3 \ 4 14 4 \ 6 10 5 \ 8 6 6 \ 10 2 8 -Figure 4-1 shows the supply and demand for socks.If a price ceiling of $10 per pair is imposed by the government,the number of pairs actually purchased will be

A flow variable

Both a price floor and a price ceiling will reduce that amount of a good that is traded in the market.

Fimure 4-3 Price Quartity Quartity Per Pair Demarded Supplied \ 2 18 3 \ 4 14 4 \ 6 10 5 \ 8 6 6 \ 10 2 8 -Figure 4-3 shows the supply and demand for socks.If a price floor of $10 is imposed,the quantity of socks actually purchased will be

A government-imposed price ceiling set below the market's equilibrium price for a good will produce an excess supply of the good.

Which of the following is an example of a stock variable?

Which of the following is not an example of a flow variable?

If an excise tax is imposed on a good or service,

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

Price ceilings are primarily targeted to help ,while price floors generally benefit .