Exam 4: Extensions of Demand and Supply Analysis

In which of the following situations will market clearing price increase and the equilibrium quantity decrease?

Which of the following statements is FALSE?

The total amount of consumer surplus and producer surplus is at its maximum when

Some oil refineries were damaged by Hurricane Ike of 2008, leading to

When the government sets a price floor which is above the equilibrium price

-Refer to the above figure. Suppose that the supply curve shifts from SA to SB while the demand curve remains at DA. Which of the following is TRUE?

An increase in supply causes

Because of scarcity, rationing is

Which of the following is a main characteristic of exchanges in the market system?

-Refer to the above figure. Suppose the government imposes a minimum wage rate of $20.00 per hour. This will likely result in

Excess quantity demanded may result from

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, the market clearing price ________ and the equilibrium quantity ________.

An example of a quantity restriction is

When producers would have been willing to accept lower prices at various quantities produced than the market clearing price, the differences are called

-Refer to the above figure. If a price ceiling of $3 was set

Since the minimum wage rate began it has typically stayed at about what percentage of the average manufacturing wage?

-Refer to the above figure. A surplus occurs if the government imposes

In 2010, a British Petroleum oil rig exploded in the Gulf of Mexico. The explosion resulted in a major oil spill and a decrease in the supply of oil. At the same time, the average price of gasoline decreased. Which of the following best explains the decrease in the price of gasoline?

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

Prices provide the rationing function best when