Question 1

Which of these would NOT be considered a middleman in a market?

Accepted Answer

A) a produce wholesaler 
B) an apple farmer 
C) a smartphone retailer 
D) a fruit distributor 
A) a produce wholesaler 
B) an apple farmer 
C) a smartphone retailer 
D) a fruit distributor

Question 2

Rationing of resources, goods, and services

Accepted Answer

A) is not required under the price system. 
B) is required because of scarcity. 
C) must be done by the government. 
D) happens only when the price is zero. 
A) is not required under the price system. 
B) is required because of scarcity. 
C) must be done by the government. 
D) happens only when the price is zero.

Question 3

Which of the following is NOT an example of a transaction cost?

Accepted Answer

A) the enjoyment of owning the good 
B) the opportunity cost of time spent looking for stores that sold the good desired 
C) the cost of returning a defective product 
D) time spent bargaining over the price of a good 
A) the enjoyment of owning the good 
B) the opportunity cost of time spent looking for stores that sold the good desired 
C) the cost of returning a defective product 
D) time spent bargaining over the price of a good

Question 4

Producer surplus is

Accepted Answer

A) the total difference between the total amount that producers actually receive for an item and the total amount that they would have been willing to accept. 
B) the total difference between the total costs firms incur in producing an item and the utility consumers derive from purchasing the item. 
C) the total difference between the total amount that consumers are willing to pay for an item and the total amount that producers would like to receive. 
D) the total difference between the utility consumers derive from purchasing an item and the total costs firms incur in producing the item. 
A) the total difference between the total amount that producers actually receive for an item and the total amount that they would have been willing to accept. 
B) the total difference between the total costs firms incur in producing an item and the utility consumers derive from purchasing the item. 
C) the total difference between the total amount that consumers are willing to pay for an item and the total amount that producers would like to receive. 
D) the total difference between the utility consumers derive from purchasing an item and the total costs firms incur in producing the item.

Question 5

-Refer to the above figure. If the government imposes a price floor of $20

Accepted Answer

A) the quantity traded will be 150, and the price will be $20. 
B) the quantity traded will be 100, and the price will be $20. 
C) the quantity traded will be 200, and the price will be $20. 
D) none of the above. 
A) the quantity traded will be 150, and the price will be $20. 
B) the quantity traded will be 100, and the price will be $20. 
C) the quantity traded will be 200, and the price will be $20. 
D) none of the above.

Question 6

In a market system, which component conveys information about what is relatively scarce and what is relatively abundant?

Accepted Answer

A) the number of producers 
B) the number of consumers 
C) prices 
D) the amount of government regulation 
A) the number of producers 
B) the number of consumers 
C) prices 
D) the amount of government regulation

Question 7

When supply increases and at the same time demand decreases, we

Accepted Answer

A) can predict that both equilibrium price and quantity will increase. 
B) can predict that both equilibrium price and quantity will decrease. 
C) cannot predict equilibrium quantity, but know that equilibrium price will decrease. 
D) cannot predict the change in either the equilibrium quantity or equilibrium price. 
A) can predict that both equilibrium price and quantity will increase. 
B) can predict that both equilibrium price and quantity will decrease. 
C) cannot predict equilibrium quantity, but know that equilibrium price will decrease. 
D) cannot predict the change in either the equilibrium quantity or equilibrium price.

Question 8

What are the effects of an increase in the minimum wage?
 Who would be most affected?

Accepted Answer

An increase in the minimum wage induces

Question 9

If supply decreases and demand increases

Accepted Answer

A) the market clearing price definitely rises, and the equilibrium quantity falls. 
B) the market clearing price definitely rises, and the equilibrium quantity is indeterminate. 
C) the market clearing price definitely falls, and the effect on the equilibrium quantity is indeterminate. 
D) the effect on the market clearing price is indeterminate, and the equilibrium quantity definitely falls. 
A) the market clearing price definitely rises, and the equilibrium quantity falls. 
B) the market clearing price definitely rises, and the equilibrium quantity is indeterminate. 
C) the market clearing price definitely falls, and the effect on the equilibrium quantity is indeterminate. 
D) the effect on the market clearing price is indeterminate, and the equilibrium quantity definitely falls.

Question 10

-Refer to the above figure. Suppose the demand curve shifts from DA to DB, while the supply curve remains at SA. Which of the following statements is FALSE?

Accepted Answer

A) There has been an increase in demand. 
B) Supply has increased. 
C) More consumers in the market might have caused the demand curve to shift. 
D) The new equilibrium price is P₂, and the new equilibrium quantity is F. 
A) There has been an increase in demand. 
B) Supply has increased. 
C) More consumers in the market might have caused the demand curve to shift. 
D) The new equilibrium price is P₂, and the new equilibrium quantity is F.

Question 11

Finding an apartment in New York City is difficult. People even scan the obituaries in the hopes of finding an apartment. Provide an economic explanation for this.

Accepted Answer

Rental rates in New York City are contro

Question 12

If both the demand curve and the supply curve shift to the right, we can unambiguously conclude that the

Accepted Answer

A) market clearing price will increase. 
B) market clearing price will decrease. 
C) equilibrium quantity will increase. 
D) equilibrium quantity will decrease. 
A) market clearing price will increase. 
B) market clearing price will decrease. 
C) equilibrium quantity will increase. 
D) equilibrium quantity will decrease.

Question 13

An effective rent control will

Accepted Answer

A) lead to a surplus of housing units. 
B) keep rents below the competitive market level. 
C) keep rents above the competitive market level. 
D) be set at the price where quantity supplied equals quantity demanded. 
A) lead to a surplus of housing units. 
B) keep rents below the competitive market level. 
C) keep rents above the competitive market level. 
D) be set at the price where quantity supplied equals quantity demanded.

Question 14

The way we know what commodities are relatively scarce or abundant is through

Accepted Answer

A) transaction costs. 
B) prices. 
C) price ceilings. 
D) price floors. 
A) transaction costs. 
B) prices. 
C) price ceilings. 
D) price floors.

Question 15

Holding supply constant, an increase in demand leads to

Accepted Answer

A) lower prices and higher quantity supplied. 
B) lower prices and lower quantity supplied. 
C) higher prices and higher quantity supplied. 
D) higher prices and lower quantity supplied. 
A) lower prices and higher quantity supplied. 
B) lower prices and lower quantity supplied. 
C) higher prices and higher quantity supplied. 
D) higher prices and lower quantity supplied.

Question 16

For a given market demand curve, if the market clearing price increases, then the amount of producer surplus will

Accepted Answer

A) decrease. 
B) increase. 
C) become negative. 
D) none of the above due to insufficient information. 
A) decrease. 
B) increase. 
C) become negative. 
D) none of the above due to insufficient information.

Question 17

In the United States, the wage floor legislated by government below which it is generally illegal to pay workers is known as

Accepted Answer

A) the minimum wage. 
B) the wage ceiling. 
C) the employment gap. 
D) the going wage. 
A) the minimum wage. 
B) the wage ceiling. 
C) the employment gap. 
D) the going wage.

Question 18

-Refer to the above figure. A price floor of $60 results in

Accepted Answer

A) a shortage of 100 units. 
B) a shortage of 200 units. 
C) a surplus of 100 units. 
D) a surplus of 200 units. 
A) a shortage of 100 units. 
B) a shortage of 200 units. 
C) a surplus of 100 units. 
D) a surplus of 200 units.

Question 19

Would it take longer for a labor market to move to a new equilibrium for house painters or architects?
 Why?

Accepted Answer

It would take longer for the market for

Question 20

In economic terms, the total price of a pound of meat for an individual who has waited in line is

Accepted Answer

A) the money price paid to the butcher for the pound of meat. 
B) the money price of meat relative to the price of bread or other necessity. 
C) the money price of the meat plus the opportunity cost of time spent waiting in line. 
D) the money price of an equal amount of meat substitute, such as beans and rice. 
A) the money price paid to the butcher for the pound of meat. 
B) the money price of meat relative to the price of bread or other necessity. 
C) the money price of the meat plus the opportunity cost of time spent waiting in line. 
D) the money price of an equal amount of meat substitute, such as beans and rice.

Which of these would NOT be considered a middleman in a market?

Rationing of resources, goods, and services

Which of the following is NOT an example of a transaction cost?

Producer surplus is

-Refer to the above figure. If the government imposes a price floor of $20

In a market system, which component conveys information about what is relatively scarce and what is relatively abundant?

When supply increases and at the same time demand decreases, we

What are the effects of an increase in the minimum wage? Who would be most affected?

If supply decreases and demand increases

-Refer to the above figure. Suppose the demand curve shifts from DA to DB, while the supply curve remains at SA. Which of the following statements is FALSE?

Finding an apartment in New York City is difficult. People even scan the obituaries in the hopes of finding an apartment. Provide an economic explanation for this.

If both the demand curve and the supply curve shift to the right, we can unambiguously conclude that the

An effective rent control will

The way we know what commodities are relatively scarce or abundant is through

Holding supply constant, an increase in demand leads to

For a given market demand curve, if the market clearing price increases, then the amount of producer surplus will

In the United States, the wage floor legislated by government below which it is generally illegal to pay workers is known as

-Refer to the above figure. A price floor of $60 results in

Would it take longer for a labor market to move to a new equilibrium for house painters or architects? Why?

In economic terms, the total price of a pound of meat for an individual who has waited in line is

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money Banking and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

Exam 4: Extensions of Demand and Supply Analysis

Which of these would NOT be considered a middleman in a market?

Rationing of resources, goods, and services

Which of the following is NOT an example of a transaction cost?

Producer surplus is

-Refer to the above figure. If the government imposes a price floor of $20

In a market system, which component conveys information about what is relatively scarce and what is relatively abundant?

When supply increases and at the same time demand decreases, we

What are the effects of an increase in the minimum wage? Who would be most affected?

If supply decreases and demand increases

-Refer to the above figure. Suppose the demand curve shifts from DA to DB, while the supply curve remains at SA. Which of the following statements is FALSE?

Finding an apartment in New York City is difficult. People even scan the obituaries in the hopes of finding an apartment. Provide an economic explanation for this.

If both the demand curve and the supply curve shift to the right, we can unambiguously conclude that the

An effective rent control will

The way we know what commodities are relatively scarce or abundant is through

Holding supply constant, an increase in demand leads to

For a given market demand curve, if the market clearing price increases, then the amount of producer surplus will

In the United States, the wage floor legislated by government below which it is generally illegal to pay workers is known as

-Refer to the above figure. A price floor of $60 results in

Would it take longer for a labor market to move to a new equilibrium for house painters or architects? Why?

In economic terms, the total price of a pound of meat for an individual who has waited in line is

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money Banking and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters