Question 1

A supply restriction that restricts the amount of a good that can be imported is a(n)

Accepted Answer

A) price floor. 
B) price ceiling. 
C) black market. 
D) import quota. 
A) price floor. 
B) price ceiling. 
C) black market. 
D) import quota.

Question 2

Garbanzo Beans
  
-Consider the above table. If the government imposes a price ceiling on garbanzo beans of $8, what would be the likely result?

Accepted Answer

A)  a surplus of 2,000 garbanzo beans on the market 
B) a shortage of 2,000 garbanzo beans on the market 
C) Market equilibrium will be reached. 
D) The quantity demanded of garbanzo beans would fall to zero. 
A)  a surplus of 2,000 garbanzo beans on the market 
B) a shortage of 2,000 garbanzo beans on the market 
C) Market equilibrium will be reached. 
D) The quantity demanded of garbanzo beans would fall to zero.

Question 3

If the demand for a product falls and the supply stays the same

Accepted Answer

A) the market clearing price will fall and the equilibrium quantity will rise. 
B) the market clearing price will rise and the equilibrium quantity will fall. 
C) both the market clearing price and the equilibrium quantity will fall. 
D) both the market clearing price and the equilibrium quantity will rise. 
A) the market clearing price will fall and the equilibrium quantity will rise. 
B) the market clearing price will rise and the equilibrium quantity will fall. 
C) both the market clearing price and the equilibrium quantity will fall. 
D) both the market clearing price and the equilibrium quantity will rise.

Question 4

In the price system

Accepted Answer

A) prices are set by government action. 
B) consumers alone set the price. 
C) producers alone set the price. 
D) prices are set by the interaction of supply and demand. 
A) prices are set by government action. 
B) consumers alone set the price. 
C) producers alone set the price. 
D) prices are set by the interaction of supply and demand.

Question 5

Which of the following statements is NOT true about the rationing of goods?

Accepted Answer

A) Goods can only be rationed by price. 
B) Goods can be rationed on a first come first serve basis. 
C) Goods can be rationed by random. 
D) Goods can be rationed by the use of coupons. 
A) Goods can only be rationed by price. 
B) Goods can be rationed on a first come first serve basis. 
C) Goods can be rationed by random. 
D) Goods can be rationed by the use of coupons.

Question 6

Suppose that the supply curve remains unchanged. If the demand curve shifts to the right

Accepted Answer

A) the market clearing price definitely will decrease. 
B) the market clearing price definitely will increase. 
C) there will be no change in the market clearing price. 
D) the market will collapse. 
A) the market clearing price definitely will decrease. 
B) the market clearing price definitely will increase. 
C) there will be no change in the market clearing price. 
D) the market will collapse.

Question 7

An economic system in which relative prices change to reflect changes in supply and demand for different commodities is known as a

Accepted Answer

A) socialist system. 
B) communist system. 
C) queuing system. 
D) market system. 
A) socialist system. 
B) communist system. 
C) queuing system. 
D) market system.

Question 8

If the government imposed a price ceiling on gasoline above this good's current market clearing price, there would be

Accepted Answer

A) a shortage of gasoline. at the ceiling price. 
B) a surplus of gasoline at the ceiling price. 
C) an increase in the price of gasoline. 
D) no change in the price of gasoline. 
A) a shortage of gasoline. at the ceiling price. 
B) a surplus of gasoline at the ceiling price. 
C) an increase in the price of gasoline. 
D) no change in the price of gasoline.

Question 9

Holding supply constant, a reduction 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 10

Which of the following will tend to occur when a surplus exists in a market?

Accepted Answer

A) supply will increase and demand will decrease until the surplus disappears. 
B) supply will decrease and demand will increase until the surplus disappears. 
C) the price will tend to rise over time. 
D) the price will tend to decrease over time. 
A) supply will increase and demand will decrease until the surplus disappears. 
B) supply will decrease and demand will increase until the surplus disappears. 
C) the price will tend to rise over time. 
D) the price will tend to decrease over time.

Question 11

Price controls

Accepted Answer

A) exist when firms decide that they want to charge a higher price for their product. 
B) exist when consumers boycott a product. 
C) are government-mandated minimum or maximum prices that may be charged for goods. 
D) are the benefit of discount stores like Sam's Club. 
A) exist when firms decide that they want to charge a higher price for their product. 
B) exist when consumers boycott a product. 
C) are government-mandated minimum or maximum prices that may be charged for goods. 
D) are the benefit of discount stores like Sam's Club.

Question 12

Rent controls are an example of a

Accepted Answer

A) price floor. 
B) price ceiling. 
C) price floor for the consumer and a price ceiling for the producer. 
D) nonprice rationing device. 
A) price floor. 
B) price ceiling. 
C) price floor for the consumer and a price ceiling for the producer. 
D) nonprice rationing device.

Question 13

Which of the following is NOT a predictable result of a price ceiling set below the market clearing price?

Accepted Answer

A) an illegal market in the good 
B) excess quantity supplied 
C) excess quantity demanded 
D) lines to purchase the product 
A) an illegal market in the good 
B) excess quantity supplied 
C) excess quantity demanded 
D) lines to purchase the product

Question 14

Minimum wages are examples of

Accepted Answer

A) a price floor. 
B) a price ceiling. 
C) the rationing function of prices not working. 
D) government increasing the demand for certain products. 
A) a price floor. 
B) a price ceiling. 
C) the rationing function of prices not working. 
D) government increasing the demand for certain products.

Question 15

Firms that produce 80 percent of all computer chips have shut down their facilities for maintenance. 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 16

An import quota is an example of

Accepted Answer

A) a price ceiling. 
B) a price floor. 
C) a queuing device. 
D) a quantity restriction. 
A) a price ceiling. 
B) a price floor. 
C) a queuing device. 
D) a quantity restriction.

Question 17

The textbook suggests that rent controls

Accepted Answer

A) actually contribute to the housing boom in an area where they are applied. 
B) actually contribute to the housing shortage in the area where they are applied. 
C) are used in a government kickback scheme. 
D) have no effect on the local housing market. 
A) actually contribute to the housing boom in an area where they are applied. 
B) actually contribute to the housing shortage in the area where they are applied. 
C) are used in a government kickback scheme. 
D) have no effect on the local housing market.

Question 18

Suppose there is a simultaneous increase in demand and increase in supply. Given this information, we know with certainty that

Accepted Answer

A) both the equilibrium price and the equilibrium quantity will increase. 
B) the equilibrium price will increase, and the equilibrium quantity will increase. 
C) the equilibrium quantity will increase. 
D) the equilibrium price will increase. 
A) both the equilibrium price and the equilibrium quantity will increase. 
B) the equilibrium price will increase, and the equilibrium quantity will increase. 
C) the equilibrium quantity will increase. 
D) the equilibrium price will increase.

Question 19

Holding demand constant, a reduction in supply leads to

Accepted Answer

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

Question 20

Who ultimately benefits from price supports in agriculture?

Accepted Answer

A) consumers 
B) grocery store owners 
C) farmers 
D) exporters 
A) consumers 
B) grocery store owners 
C) farmers 
D) exporters

A supply restriction that restricts the amount of a good that can be imported is a(n)

Garbanzo Beans -Consider the above table. If the government imposes a price ceiling on garbanzo beans of $8, what would be the likely result?

If the demand for a product falls and the supply stays the same

In the price system

Which of the following statements is NOT true about the rationing of goods?

Suppose that the supply curve remains unchanged. If the demand curve shifts to the right

An economic system in which relative prices change to reflect changes in supply and demand for different commodities is known as a

If the government imposed a price ceiling on gasoline above this good's current market clearing price, there would be

Holding supply constant, a reduction in demand leads to

Which of the following will tend to occur when a surplus exists in a market?

Price controls

Rent controls are an example of a

Which of the following is NOT a predictable result of a price ceiling set below the market clearing price?

Minimum wages are examples of

Firms that produce 80 percent of all computer chips have shut down their facilities for maintenance. In the computer chip market this will lead to

An import quota is an example of

The textbook suggests that rent controls

Suppose there is a simultaneous increase in demand and increase in supply. Given this information, we know with certainty that

Holding demand constant, a reduction in supply leads to

Who ultimately benefits from price supports in agriculture?

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

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Exam 4: Extensions of Demand and Supply Analysis

A supply restriction that restricts the amount of a good that can be imported is a(n)

Garbanzo Beans -Consider the above table. If the government imposes a price ceiling on garbanzo beans of $8, what would be the likely result?

If the demand for a product falls and the supply stays the same

In the price system

Which of the following statements is NOT true about the rationing of goods?

Suppose that the supply curve remains unchanged. If the demand curve shifts to the right

An economic system in which relative prices change to reflect changes in supply and demand for different commodities is known as a

If the government imposed a price ceiling on gasoline above this good's current market clearing price, there would be

Holding supply constant, a reduction in demand leads to

Which of the following will tend to occur when a surplus exists in a market?

Price controls

Rent controls are an example of a

Which of the following is NOT a predictable result of a price ceiling set below the market clearing price?

Minimum wages are examples of

Firms that produce 80 percent of all computer chips have shut down their facilities for maintenance. In the computer chip market this will lead to

An import quota is an example of

The textbook suggests that rent controls

Suppose there is a simultaneous increase in demand and increase in supply. Given this information, we know with certainty that

Holding demand constant, a reduction in supply leads to

Who ultimately benefits from price supports in agriculture?

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