Question 1

When price is below the equilibrium level,there is a shortage of the commodity being sold.

Accepted Answer

A) True 
 B)False  True

Question 2

In relation to prices that would prevail in an uncontrolled market,prices charged by a black market are usually

Accepted Answer

A)  lower, since it is hard for the sellers to locate buyers. 
B)  lower, since it is hard for the buyers to locate sellers. 
C)  higher, since black marketers expect compensation for the risk of being caught. 
D)  higher, since most people enjoy goods more if they are illegal. 
A)  lower, since it is hard for the sellers to locate buyers. 
B)  lower, since it is hard for the buyers to locate sellers. 
C)  higher, since black marketers expect compensation for the risk of being caught. 
D)  higher, since most people enjoy goods more if they are illegal. C

Question 3

Figure 4-19
  
-After a strike against the Financial News in London began,the number of copies of the competing Broad Street Journal sold in England increased dramatically,yet there was no increase in price.Which supply and demand graph in Figure 4-19 represents the situation for the Broad Street Journal before the strike started?

Accepted Answer

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

Question 4

Which of the following is not a symptom associated with a price floor?

Accepted Answer

A)  Excess of quantity demanded over quantity supplied. 
B)  Sellers offering discounts in disguised forms. 
C)  Problem of disposal created by excess supply. 
D)  Survival of inefficient businesses. 
A)  Excess of quantity demanded over quantity supplied. 
B)  Sellers offering discounts in disguised forms. 
C)  Problem of disposal created by excess supply. 
D)  Survival of inefficient businesses.

Question 5

The price of gasoline has risen and the quantity sold has fallen.This was likely caused by

Accepted Answer

A)  a rise in the price of crude oil. 
B)  a seasonal rise in the demand for gasoline. 
C)  use of a new public transit system. 
D)  the discovery of crude oil in New Jersey. 
A)  a rise in the price of crude oil. 
B)  a seasonal rise in the demand for gasoline. 
C)  use of a new public transit system. 
D)  the discovery of crude oil in New Jersey.

Question 6

An increase in demand will have what effect on equilibrium price and quantity?

Accepted Answer

A)  Price will increase; quantity will decrease. 
B)  Price will decrease; quantity will increase. 
C)  Both price and quantity will increase. 
D)  Both price and quantity will decrease. 
A)  Price will increase; quantity will decrease. 
B)  Price will decrease; quantity will increase. 
C)  Both price and quantity will increase. 
D)  Both price and quantity will decrease.

Question 7

The demand curve for a typical good has

Accepted Answer

A)  a negative slope because some consumers switch to other goods as the price of the good rises. 
B)  a negative slope because the supply of the good rises as demand rises. 
C)  a negative slope because the good has less "snob appeal" as its price falls. 
D)  an inverse slope because as the price goes up, the good has more profitability. 
E)  a positive slope because price is a clear indicator of need. 
A)  a negative slope because some consumers switch to other goods as the price of the good rises. 
B)  a negative slope because the supply of the good rises as demand rises. 
C)  a negative slope because the good has less "snob appeal" as its price falls. 
D)  an inverse slope because as the price goes up, the good has more profitability. 
E)  a positive slope because price is a clear indicator of need.

Question 8

A change in the price of hamburgers will change the supply of hot dogs.

Accepted Answer

A) True 
 B)False

Question 9

Firms often seek to borrow money to expand their capital stock,and the price they pay for the money is the interest rate.What happens to supply of money if the interest 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.

Question 10

Figure 4-16
  
-Assume that Figure 4-16 shows the supply of orange juice.A decrease in the wage rate paid to workers in the orange juice industry will shift supply from

Accepted Answer

A)  S1 to S2. 
B)  S2 to S1. 
C)  S3 to S2. 
D)  S3 to S1. 
A)  S1 to S2. 
B)  S2 to S1. 
C)  S3 to S2. 
D)  S3 to S1.

Question 11

What are the major problems that will tend to arise if there are legal limits on the movement of prices?

Accepted Answer

A)  favoritism and corruption of officials and market participants 
B)  unenforceability of laws and higher costs of transactions 
C)  increasing restrictions to enforce the laws 
D)  misallocation of resources as prices no longer correspond to costs 
E)  All of the above are correct. 
A)  favoritism and corruption of officials and market participants 
B)  unenforceability of laws and higher costs of transactions 
C)  increasing restrictions to enforce the laws 
D)  misallocation of resources as prices no longer correspond to costs 
E)  All of the above are correct.

Question 12

Equilibrium is reached where there is no inherent force causing quantity supplied or quantity demanded to change.

Accepted Answer

A) True 
 B)False

Question 13

The price of one good produced by a multiproduct industry rises.For another good produced by that industry

Accepted Answer

A)  the supply curve will shift to the left. 
B)  the supply curve will remain constant. 
C)  the supply curve will shift to the right. 
D)  the demand curve will shift to the right. 
A)  the supply curve will shift to the left. 
B)  the supply curve will remain constant. 
C)  the supply curve will shift to the right. 
D)  the demand curve will shift to the right.

Question 14

Figure 4-11
  
-The Russian government has restricted sugar availability to reduce the supply of illegal liquor (sugar is used to increase alcohol content).Russians also like to sweeten their tea with jam,another sugar product.Which graph in Figure 4-11 depicts the impact of sugar rationing on the Russian tea market?

Accepted Answer

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

Question 15

How will a decrease in price tend to affect supply?

Accepted Answer

A)  Supply will increase. 
B)  Supply will decrease. 
C)  Supply will not change. 
D)  Uncertain. 
A)  Supply will increase. 
B)  Supply will decrease. 
C)  Supply will not change. 
D)  Uncertain.

Question 16

The following price-quantity coordinates for gold used by U.S.dentists were observed: P = $875/ounce,Q = 342,000; P = $200/ounce,Q = 706,000.These points most likely lie along the

Accepted Answer

A)  supply curve for gold for dental use. 
B)  demand curve for dental use. 
C)  equilibrium curve for dental use. 
D)  production possibilities curve for dental use. 
A)  supply curve for gold for dental use. 
B)  demand curve for dental use. 
C)  equilibrium curve for dental use. 
D)  production possibilities curve for dental use.

Question 17

A demand schedule is a table showing how the ____ of some product during a specified period of time changes as ____ changes,holding all other determinants of quantity demanded constant.

Accepted Answer

A)  demand; the price of its complement 
B)  demand; the quantity supplied 
C)  quantity demanded; the price of its substitute 
D)  quantity demanded; the price of that product 
A)  demand; the price of its complement 
B)  demand; the quantity supplied 
C)  quantity demanded; the price of its substitute 
D)  quantity demanded; the price of that product

Question 18

If the demand for steak shifts to the right,the most likely explanation is that

Accepted Answer

A)  the price of cattle feed has fallen. 
B)  consumer income has risen. 
C)  the price of steak has fallen. 
D)  cattle production has fallen. 
A)  the price of cattle feed has fallen. 
B)  consumer income has risen. 
C)  the price of steak has fallen. 
D)  cattle production has fallen.

Question 19

A supply schedule shows

Accepted Answer

A)  the "market potential" for a product. 
B)  how much producers are willing and able to sell at different prices. 
C)  possible combinations of output under different conditions. 
D)  how much consumers would like to buy at different prices. 
E)  All of the above are correct. 
A)  the "market potential" for a product. 
B)  how much producers are willing and able to sell at different prices. 
C)  possible combinations of output under different conditions. 
D)  how much consumers would like to buy at different prices. 
E)  All of the above are correct.

Question 20

How does rent control tend to cause persistent imbalances in the market for housing?

Accepted Answer

A)  Quantity demanded exceeds quantity supplied but price cannot rise to remove the shortage. 
B)  Quantity demanded exceeds quantity supplied but price cannot fall to remove the surplus. 
C)  Quantity supplied exceeds quantity demanded but price cannot rise to remove the shortage. 
D)  Quantity supplied exceeds quantity demanded but price cannot fall to remove the surplus. 
A)  Quantity demanded exceeds quantity supplied but price cannot rise to remove the shortage. 
B)  Quantity demanded exceeds quantity supplied but price cannot fall to remove the surplus. 
C)  Quantity supplied exceeds quantity demanded but price cannot rise to remove the shortage. 
D)  Quantity supplied exceeds quantity demanded but price cannot fall to remove the surplus.

When price is below the equilibrium level,there is a shortage of the commodity being sold.

In relation to prices that would prevail in an uncontrolled market,prices charged by a black market are usually

Which of the following is not a symptom associated with a price floor?

The price of gasoline has risen and the quantity sold has fallen.This was likely caused by

An increase in demand will have what effect on equilibrium price and quantity?

The demand curve for a typical good has

A change in the price of hamburgers will change the supply of hot dogs.

Firms often seek to borrow money to expand their capital stock,and the price they pay for the money is the interest rate.What happens to supply of money if the interest rate increases?

Figure 4-16 -Assume that Figure 4-16 shows the supply of orange juice.A decrease in the wage rate paid to workers in the orange juice industry will shift supply from

What are the major problems that will tend to arise if there are legal limits on the movement of prices?

Equilibrium is reached where there is no inherent force causing quantity supplied or quantity demanded to change.

The price of one good produced by a multiproduct industry rises.For another good produced by that industry

How will a decrease in price tend to affect supply?

The following price-quantity coordinates for gold used by U.S.dentists were observed: P = $875/ounce,Q = 342,000; P = $200/ounce,Q = 706,000.These points most likely lie along the

A demand schedule is a table showing how the of some product during a specified period of time changes as changes,holding all other determinants of quantity demanded constant.

If the demand for steak shifts to the right,the most likely explanation is that

A supply schedule shows

How does rent control tend to cause persistent imbalances in the market for housing?

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

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

Filters

Exam 4: Supply and Demand: An Initial Look

When price is below the equilibrium level,there is a shortage of the commodity being sold.

In relation to prices that would prevail in an uncontrolled market,prices charged by a black market are usually

Which of the following is not a symptom associated with a price floor?

The price of gasoline has risen and the quantity sold has fallen.This was likely caused by

An increase in demand will have what effect on equilibrium price and quantity?

The demand curve for a typical good has

A change in the price of hamburgers will change the supply of hot dogs.

Firms often seek to borrow money to expand their capital stock,and the price they pay for the money is the interest rate.What happens to supply of money if the interest rate increases?

Figure 4-16 -Assume that Figure 4-16 shows the supply of orange juice.A decrease in the wage rate paid to workers in the orange juice industry will shift supply from

What are the major problems that will tend to arise if there are legal limits on the movement of prices?

Equilibrium is reached where there is no inherent force causing quantity supplied or quantity demanded to change.

The price of one good produced by a multiproduct industry rises.For another good produced by that industry

How will a decrease in price tend to affect supply?

The following price-quantity coordinates for gold used by U.S.dentists were observed: P = $875/ounce,Q = 342,000; P = $200/ounce,Q = 706,000.These points most likely lie along the

A demand schedule is a table showing how the ____ of some product during a specified period of time changes as ____ changes,holding all other determinants of quantity demanded constant.

If the demand for steak shifts to the right,the most likely explanation is that

A supply schedule shows

How does rent control tend to cause persistent imbalances in the market for housing?

What Is Economics?

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

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

Filters

A demand schedule is a table showing how the of some product during a specified period of time changes as changes,holding all other determinants of quantity demanded constant.