Question 1

Figure 3.4
  
-In Figure 3.4, if the wage rate in market A and market B were set at $15, then

Accepted Answer

A)  there would be a shortage of workers in both markets. 
B)  there would be a surplus of workers in both markets. 
C)  there would be a shortage of workers in market A and a surplus of workers in market B. 
D)  there would be a shortage of workers in market B and a surplus of workers in market A. 
E)  the market as a whole would be in equilibrium. 
A)  there would be a shortage of workers in both markets. 
B)  there would be a surplus of workers in both markets. 
C)  there would be a shortage of workers in market A and a surplus of workers in market B. 
D)  there would be a shortage of workers in market B and a surplus of workers in market A. 
E)  the market as a whole would be in equilibrium.

Question 2

Creative destruction is the process in which temporary losses are outweighed by long run gains.

Accepted Answer

A) True 
 B)False

Question 3

Equilibrium in a market results when the market produces an output at which the price consumers are willing to pay exactly equals the price producers are willing to accept.

Accepted Answer

A) True 
 B)False

Question 4

If the government wanted to aid a particular industry, it might impose a(n) ____ for their products.

Accepted Answer

A)  price floor. 
B)  price ceiling. 
C)  quantity floor. 
D)  quantity ceiling. 
E)  equilibrium pricing. 
A)  price floor. 
B)  price ceiling. 
C)  quantity floor. 
D)  quantity ceiling. 
E)  equilibrium pricing.

Question 5

Some Italian factories bring Chinese workers and raw materials to Italy, where these resources are used to make products sold under the label, "Made in Italy". This is an example of

Accepted Answer

A)  Unfettered market 
B)  Human trafficking 
C)  Labor differential 
D)  Specialization 
E)  Tax avoidance 
A)  Unfettered market 
B)  Human trafficking 
C)  Labor differential 
D)  Specialization 
E)  Tax avoidance

Question 6

A minimum wage that is above the market wage will likely

Accepted Answer

A)  create some unemployment. 
B)  increase employment opportunities. 
C)  cause a shortage of labor. 
D)  eliminate poverty. 
E)  increase the demand for labor. 
A)  create some unemployment. 
B)  increase employment opportunities. 
C)  cause a shortage of labor. 
D)  eliminate poverty. 
E)  increase the demand for labor.

Question 7

The fact that the market labor supply curve is upward sloping at all wage rates illustrates that

Accepted Answer

A)  all people supply more labor as the wage rate increases. 
B)  the combined effect of individual labor supply curves results in a greater number of labor hours being supplied at a higher wage rate. 
C)  the compensating wage differential works. 
D)  at high wages, people will decrease labor supply when wages rise further and thus make aggregate labor supply decrease. 
E)  the marginal benefits of leisure decrease as wages increase. 
A)  all people supply more labor as the wage rate increases. 
B)  the combined effect of individual labor supply curves results in a greater number of labor hours being supplied at a higher wage rate. 
C)  the compensating wage differential works. 
D)  at high wages, people will decrease labor supply when wages rise further and thus make aggregate labor supply decrease. 
E)  the marginal benefits of leisure decrease as wages increase.

Question 8

Figure 3.4
  
-In Figure 3.4, the amount of the wage differential is

Accepted Answer

A)  $6. 
B)  $18. 
C)  $12. 
D)  $30. 
E)  impossible to determine from the information given. 
A)  $6. 
B)  $18. 
C)  $12. 
D)  $30. 
E)  impossible to determine from the information given.

Question 9

Figure 3.3
  
-In Figure 3.3, the initial labor supply is S1 and the labor demand is D1. If the wage is $6, which of the following is correct?

Accepted Answer

A)  There is a shortage of 20 workers. 
B)  The actual wage is above the equilibrium wage. 
C)  There is a shortage of 30 workers. 
D)  There is a shortage of 10 workers. 
E)  The market is in equilibrium. 
A)  There is a shortage of 20 workers. 
B)  The actual wage is above the equilibrium wage. 
C)  There is a shortage of 30 workers. 
D)  There is a shortage of 10 workers. 
E)  The market is in equilibrium.

Question 10

A quota is a tax on an imported good.

Accepted Answer

A) True 
 B)False

Question 11

People take jobs in unpleasant, low-wage facilities voluntarily.

Accepted Answer

A) True 
 B)False

Question 12

-In Table 3.2, if the price is $2, a ____ of ____ units will occur.

Accepted Answer

A)  shortage; 12 
B)  shortage; 14 
C)  surplus; 12 
D)  surplus; 14 
E)  surplus; 19 
A)  shortage; 12 
B)  shortage; 14 
C)  surplus; 12 
D)  surplus; 14 
E)  surplus; 19

Question 13

In a market system, resources flow from lower-valued uses to higher-valued uses because of

Accepted Answer

A)  the dictates of the government. 
B)  the desires of business to make a profit. 
C)  first come, first served. 
D)  the consumer is always right. 
E)  comparative advantage. 
A)  the dictates of the government. 
B)  the desires of business to make a profit. 
C)  first come, first served. 
D)  the consumer is always right. 
E)  comparative advantage.

Question 14

Figure 3.7
  
-A price of $10 in Figure 3.7 will result in

Accepted Answer

A)  a surplus of 150 units. 
B)  a surplus of 100 units. 
C)  a shortage of 50 units. 
D)  a shortage of 100 units. 
E)  equilibrium. 
A)  a surplus of 150 units. 
B)  a surplus of 100 units. 
C)  a shortage of 50 units. 
D)  a shortage of 100 units. 
E)  equilibrium.

Question 15

"Efficiency" means you get the same amount at a higher cost.

Accepted Answer

A) True 
 B)False

Question 16

It is very difficult for a firm to sustain its success over many years.

Accepted Answer

A) True 
 B)False

Question 17

Rent control is

Accepted Answer

A)  a situation where a price floor exists. 
B)  the same as a minimum wage. 
C)  the same as a subsidy to landlords. 
D)  a situation where a price ceiling exists. 
E)  a situation where equilibrium persists. 
A)  a situation where a price floor exists. 
B)  the same as a minimum wage. 
C)  the same as a subsidy to landlords. 
D)  a situation where a price ceiling exists. 
E)  a situation where equilibrium persists.

Question 18

Which of the following is not correct?

Accepted Answer

A)  A person may be paid a wage higher than he or she is worth, if he or she works in a risky profession. 
B)  A person in a risky profession will likely be paid more than a person of equal skills in another profession. 
C)  It is possible that a person will turn down a higher-paying job because his or her current job provides many nonmonetary benefits. 
D)  By increasing his or her human capital, a worker can expect to receive a higher wage. 
E)  If there were no compensating wage differential, there would be a shortage of workers in risky professions. 
A)  A person may be paid a wage higher than he or she is worth, if he or she works in a risky profession. 
B)  A person in a risky profession will likely be paid more than a person of equal skills in another profession. 
C)  It is possible that a person will turn down a higher-paying job because his or her current job provides many nonmonetary benefits. 
D)  By increasing his or her human capital, a worker can expect to receive a higher wage. 
E)  If there were no compensating wage differential, there would be a shortage of workers in risky professions.

Question 19

Figure 3.1
  
-According to Figure 3.1, as represented by the shift from D1 to D2,

Accepted Answer

A)  the demand for low-fat food has risen. 
B)  the quantity of low-fat food supplied has declined. 
C)  eating low-fat food may have become popular. 
D)  consumer tastes for low-fat food may have risen. 
E)  consumer tastes for high-fat food may have fallen. 
A)  the demand for low-fat food has risen. 
B)  the quantity of low-fat food supplied has declined. 
C)  eating low-fat food may have become popular. 
D)  consumer tastes for low-fat food may have risen. 
E)  consumer tastes for high-fat food may have fallen.

Question 20

Individual states may set their own minimum wage

Accepted Answer

A)  at any time, regardless of the federal minimum wage 
B)  if their wage exceeds the federal level 
C)  only if it is below the federal level 
D)  by filing an application with the federal department of labor 
E)  only in times of emergency 
A)  at any time, regardless of the federal minimum wage 
B)  if their wage exceeds the federal level 
C)  only if it is below the federal level 
D)  by filing an application with the federal department of labor 
E)  only in times of emergency

Figure 3.4 -In Figure 3.4, if the wage rate in market A and market B were set at $15, then

Creative destruction is the process in which temporary losses are outweighed by long run gains.

Equilibrium in a market results when the market produces an output at which the price consumers are willing to pay exactly equals the price producers are willing to accept.

If the government wanted to aid a particular industry, it might impose a(n) ____ for their products.

Some Italian factories bring Chinese workers and raw materials to Italy, where these resources are used to make products sold under the label, "Made in Italy". This is an example of

A minimum wage that is above the market wage will likely

The fact that the market labor supply curve is upward sloping at all wage rates illustrates that

Figure 3.4 -In Figure 3.4, the amount of the wage differential is

Figure 3.3 -In Figure 3.3, the initial labor supply is S₁ and the labor demand is D₁. If the wage is $6, which of the following is correct?

A quota is a tax on an imported good.

People take jobs in unpleasant, low-wage facilities voluntarily.

-In Table 3.2, if the price is $2, a of units will occur.

In a market system, resources flow from lower-valued uses to higher-valued uses because of

Figure 3.7 -A price of $10 in Figure 3.7 will result in

"Efficiency" means you get the same amount at a higher cost.

It is very difficult for a firm to sustain its success over many years.

Rent control is

Which of the following is not correct?

Figure 3.1 -According to Figure 3.1, as represented by the shift from D₁ to D₂,

Individual states may set their own minimum wage

Economics and the World Around You

Markets and the Market Process

The Firm and the Consumer

Costs and Profit Maximization

Competition

Business, Society, and the Government

Government Intervention Versus Free Markets

An Overview of the National and International Economies

Macroeconomic Measures

Unemployment, Inflation, and Business Cycles

Macroeconomic Equilibrium: Aggregate Demand and Supply

Fiscal Policy

Money and Banking

Monetary Policy

Macroeconomic Policy, Business Cycles, and Growth

Issues in International Trade and Finance

Globalization

Filters

Exam 3: Applications of Demand and Supply

Figure 3.4 -In Figure 3.4, if the wage rate in market A and market B were set at $15, then

Creative destruction is the process in which temporary losses are outweighed by long run gains.

Equilibrium in a market results when the market produces an output at which the price consumers are willing to pay exactly equals the price producers are willing to accept.

If the government wanted to aid a particular industry, it might impose a(n) ____ for their products.

Some Italian factories bring Chinese workers and raw materials to Italy, where these resources are used to make products sold under the label, "Made in Italy". This is an example of

A minimum wage that is above the market wage will likely

The fact that the market labor supply curve is upward sloping at all wage rates illustrates that

Figure 3.4 -In Figure 3.4, the amount of the wage differential is

Figure 3.3 -In Figure 3.3, the initial labor supply is S1 and the labor demand is D1. If the wage is $6, which of the following is correct?

A quota is a tax on an imported good.

People take jobs in unpleasant, low-wage facilities voluntarily.

-In Table 3.2, if the price is $2, a ____ of ____ units will occur.

In a market system, resources flow from lower-valued uses to higher-valued uses because of

Figure 3.7 -A price of $10 in Figure 3.7 will result in

"Efficiency" means you get the same amount at a higher cost.

It is very difficult for a firm to sustain its success over many years.

Rent control is

Which of the following is not correct?

Figure 3.1 -According to Figure 3.1, as represented by the shift from D1 to D2,

Individual states may set their own minimum wage

Economics and the World Around You

Markets and the Market Process

The Firm and the Consumer

Costs and Profit Maximization

Competition

Business, Society, and the Government

Government Intervention Versus Free Markets

An Overview of the National and International Economies

Macroeconomic Measures

Unemployment, Inflation, and Business Cycles

Macroeconomic Equilibrium: Aggregate Demand and Supply

Fiscal Policy

Money and Banking

Monetary Policy

Macroeconomic Policy, Business Cycles, and Growth

Issues in International Trade and Finance

Globalization

Filters

Figure 3.3 -In Figure 3.3, the initial labor supply is S₁ and the labor demand is D₁. If the wage is $6, which of the following is correct?

-In Table 3.2, if the price is $2, a of units will occur.

Figure 3.1 -According to Figure 3.1, as represented by the shift from D₁ to D₂,