Question 1

An unexpected import restriction imposed on mangoes by the USDA

Accepted Answer

A) will reduce the price of mangoes in the United States. 
B) will increase the price of mangoes in the United States. 
C) will discourage American producers of mangoes. 
D) will reduce the price of mango juice in the United States. 
A) will reduce the price of mangoes in the United States. 
B) will increase the price of mangoes in the United States. 
C) will discourage American producers of mangoes. 
D) will reduce the price of mango juice in the United States.

Question 2

A price ceiling is

Accepted Answer

A) the lowest price a seller can charge without losing all of its customers. 
B) a legal minimum price below which a good or service cannot be sold. 
C) a legal price above which a good or service cannot be sold. 
D) a nonprice rationing device. 
A) the lowest price a seller can charge without losing all of its customers. 
B) a legal minimum price below which a good or service cannot be sold. 
C) a legal price above which a good or service cannot be sold. 
D) a nonprice rationing device.

Question 3

Hospitals announce that there are not enough nurses available to keep them fully staffed. Economically speaking, what does this announcement mean?

Accepted Answer

A) The market wage for trained nurses is currently above the equilibrium wage. 
B) There is currently a surplus of nurses in this market. 
C) The market wage for nurses will eventually rise to the market clearing wage. 
D) The market will adjust very rapidly to correct this imbalance because anyone can be a nurse without any training. 
A) The market wage for trained nurses is currently above the equilibrium wage. 
B) There is currently a surplus of nurses in this market. 
C) The market wage for nurses will eventually rise to the market clearing wage. 
D) The market will adjust very rapidly to correct this imbalance because anyone can be a nurse without any training.

Question 4

Rent controls often have adverse effects, including

Accepted Answer

A) too much housing in a community. 
B) deterioration in the quality of existing rental units. 
C) too much construction of new rental units in the community. 
D) income transfers from the poor to landlords. 
A) too much housing in a community. 
B) deterioration in the quality of existing rental units. 
C) too much construction of new rental units in the community. 
D) income transfers from the poor to landlords.

Question 5

In order to be effective, a price floor

Accepted Answer

A) must be set below equilibrium price. 
B) must be set above equilibrium price. 
C) must be set at equilibrium price. 
D) must be a zero price. 
A) must be set below equilibrium price. 
B) must be set above equilibrium price. 
C) must be set at equilibrium price. 
D) must be a zero price.

Question 6

A technological advancement has just occurred in the computer chip industry. In the computer chip market this will lead to

Accepted Answer

A) an increase in price and a decrease in quantity. 
B) an increase in price and an increase in quantity. 
C) a decrease in price and a decrease in quantity. 
D) a decrease in price and an increase in quantity. 
A) an increase in price and a decrease in quantity. 
B) an increase in price and an increase in quantity. 
C) a decrease in price and a decrease in quantity. 
D) a decrease in price and an increase in quantity.

Question 7

Why does an economy need a rationing mechanism?

Accepted Answer

A) because of scarcity 
B) because it preserves the power of the wealthy 
C) because it eliminates poverty 
D) All of the above are correct. 
A) because of scarcity 
B) because it preserves the power of the wealthy 
C) because it eliminates poverty 
D) All of the above are correct.

Question 8

In a market system, what must take place for quantity demanded to continually be equated with quantity supplied?

Accepted Answer

A) Price controls must be applied by governments. 
B) Relative prices must be able to adjust to market clearing levels. 
C) Tastes and preferences of consumers must adjust to eliminate surpluses or shortages. 
D) Businesses must engage in involuntary, unprofitable exchanges to eliminate surpluses or shortages. 
A) Price controls must be applied by governments. 
B) Relative prices must be able to adjust to market clearing levels. 
C) Tastes and preferences of consumers must adjust to eliminate surpluses or shortages. 
D) Businesses must engage in involuntary, unprofitable exchanges to eliminate surpluses or shortages.

Question 9

Garbanzo Beans
  
-Consider the above table. Assuming the government imposes a price ceiling on garbanzo beans of $4, what would be the likely result?

Accepted Answer

A) a surplus of 2,000 garbanzo beans 
B) a shortage of 2,000 garbanzo beans 
C) No change, equilibrium would prevail. 
D) The quantity demanded of garbanzo beans would fall to zero. 
A) a surplus of 2,000 garbanzo beans 
B) a shortage of 2,000 garbanzo beans 
C) No change, equilibrium would prevail. 
D) The quantity demanded of garbanzo beans would fall to zero.

Question 10

An import quota will

Accepted Answer

A) lead to a shift of the demand curve. 
B) leave the equilibrium price unchanged and increase the quantity sold. 
C) limit the amount of a foreign good that can be brought into the United States. 
D) limit the amount of a good local producers can make. 
A) lead to a shift of the demand curve. 
B) leave the equilibrium price unchanged and increase the quantity sold. 
C) limit the amount of a foreign good that can be brought into the United States. 
D) limit the amount of a good local producers can make.

Question 11

All other factors being constant, a reduction in price tends to cause which of the following?

Accepted Answer

A) an increase in supply and an increase in demand 
B) a reduction in supply and an increase in demand 
C) an increase in quantity supplied and a reduction in quantity demanded 
D) a reduction in quantity supplied and an increase in quantity demanded 
A) an increase in supply and an increase in demand 
B) a reduction in supply and an increase in demand 
C) an increase in quantity supplied and a reduction in quantity demanded 
D) a reduction in quantity supplied and an increase in quantity demanded

Question 12

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

Accepted Answer

A) the quantity of goods that will be traded is 100. 
B) the quantity of goods that will be traded is 200. 
C) the quantity of goods that will be traded is 150. 
D) the quantity of goods that will be traded is 0. 
A) the quantity of goods that will be traded is 100. 
B) the quantity of goods that will be traded is 200. 
C) the quantity of goods that will be traded is 150. 
D) the quantity of goods that will be traded is 0.

Question 13

Suppose the price of crude oil used to produce gasoline rises significantly. At the same time, consumers purchase hybrid cars in great numbers. In the market for gasoline, demand shifts to the ________ and supply shifts to the ________.

Accepted Answer

A) left, left 
B) left, right 
C) right, left 
D) right, right 
A) left, left 
B) left, right 
C) right, left 
D) right, right

Question 14

Suppose you observe that the price of movie admissions decline and that the number of people attending movies declines as well. If only the demand curve or the supply curve shifts, this suggests that

Accepted Answer

A) movies are a normal good and incomes have increased. 
B) high salaries for Hollywood actors have increased the cost of movie making. 
C) movie theaters have experienced an increase in their operating costs due to increases in the minimum wage. 
D) admission prices for other types of entertainment, such as live shows and sporting events, have also declined. 
A) movies are a normal good and incomes have increased. 
B) high salaries for Hollywood actors have increased the cost of movie making. 
C) movie theaters have experienced an increase in their operating costs due to increases in the minimum wage. 
D) admission prices for other types of entertainment, such as live shows and sporting events, have also declined.

Question 15

Relative scarcities are indicated by

Accepted Answer

A) supply and demand being out of equilibrium. 
B) surpluses. 
C) excess demand and excess supply. 
D) relative prices. 
A) supply and demand being out of equilibrium. 
B) surpluses. 
C) excess demand and excess supply. 
D) relative prices.

Question 16

The price system has

Accepted Answer

A) prices fixed by the government. 
B) prices fixed by the seller. 
C) voluntary exchange. 
D) prices fixed by the producer. 
A) prices fixed by the government. 
B) prices fixed by the seller. 
C) voluntary exchange. 
D) prices fixed by the producer.

Question 17

All of the following are examples of nonprice rationing devices EXCEPT

Accepted Answer

A) price controls. 
B) queues. 
C) black markets. 
D) waiting lists. 
A) price controls. 
B) queues. 
C) black markets. 
D) waiting lists.

Question 18

A price floor above the market clearing price typically results in I. an excess quantity supplied
II. a shortage
III. an excess quantity demand

Accepted Answer

A) I only 
B) II only 
C) III only 
D) II and III only 
A) I only 
B) II only 
C) III only 
D) II and III only

Question 19

What has been the market outcome of government-enforced price floors for agricultural products?

Accepted Answer

A) Not enough food has been produced. 
B) Farmers have been made worse off. 
C) A shortage of agricultural products has resulted. 
D) A surplus of agricultural products has resulted. 
A) Not enough food has been produced. 
B) Farmers have been made worse off. 
C) A shortage of agricultural products has resulted. 
D) A surplus of agricultural products has resulted.

Question 20

-Refer to the above figure for the corn market. The government wants to set an effective price support in the corn market. To be effective the price should be set

Accepted Answer

A) below P₁. 
B) at P₁. 
C) at P₂. 
D) at P₃. 
A) below P₁. 
B) at P₁. 
C) at P₂. 
D) at P₃.

An unexpected import restriction imposed on mangoes by the USDA

A price ceiling is

Hospitals announce that there are not enough nurses available to keep them fully staffed. Economically speaking, what does this announcement mean?

Rent controls often have adverse effects, including

In order to be effective, a price floor

A technological advancement has just occurred in the computer chip industry. In the computer chip market this will lead to

Why does an economy need a rationing mechanism?

In a market system, what must take place for quantity demanded to continually be equated with quantity supplied?

Garbanzo Beans -Consider the above table. Assuming the government imposes a price ceiling on garbanzo beans of $4, what would be the likely result?

An import quota will

All other factors being constant, a reduction in price tends to cause which of the following?

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

Suppose the price of crude oil used to produce gasoline rises significantly. At the same time, consumers purchase hybrid cars in great numbers. In the market for gasoline, demand shifts to the and supply shifts to the .

Suppose you observe that the price of movie admissions decline and that the number of people attending movies declines as well. If only the demand curve or the supply curve shifts, this suggests that

Relative scarcities are indicated by

The price system has

All of the following are examples of nonprice rationing devices EXCEPT

A price floor above the market clearing price typically results in I. an excess quantity supplied II. a shortage III. an excess quantity demand

What has been the market outcome of government-enforced price floors for agricultural products?

-Refer to the above figure for the corn market. The government wants to set an effective price support in the corn market. To be effective the price should be set

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

An unexpected import restriction imposed on mangoes by the USDA

A price ceiling is

Hospitals announce that there are not enough nurses available to keep them fully staffed. Economically speaking, what does this announcement mean?

Rent controls often have adverse effects, including

In order to be effective, a price floor

A technological advancement has just occurred in the computer chip industry. In the computer chip market this will lead to

Why does an economy need a rationing mechanism?

In a market system, what must take place for quantity demanded to continually be equated with quantity supplied?

Garbanzo Beans -Consider the above table. Assuming the government imposes a price ceiling on garbanzo beans of $4, what would be the likely result?

An import quota will

All other factors being constant, a reduction in price tends to cause which of the following?

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

Suppose the price of crude oil used to produce gasoline rises significantly. At the same time, consumers purchase hybrid cars in great numbers. In the market for gasoline, demand shifts to the ________ and supply shifts to the ________.

Suppose you observe that the price of movie admissions decline and that the number of people attending movies declines as well. If only the demand curve or the supply curve shifts, this suggests that

Relative scarcities are indicated by

The price system has

All of the following are examples of nonprice rationing devices EXCEPT

A price floor above the market clearing price typically results in I. an excess quantity supplied II. a shortage III. an excess quantity demand

What has been the market outcome of government-enforced price floors for agricultural products?

-Refer to the above figure for the corn market. The government wants to set an effective price support in the corn market. To be effective the price should be set

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

Suppose the price of crude oil used to produce gasoline rises significantly. At the same time, consumers purchase hybrid cars in great numbers. In the market for gasoline, demand shifts to the and supply shifts to the .