Question 1

Price ceilings will likely result in the growth of black markets.

Accepted Answer

A) True 
 B)False

Question 2

A cold winter will increase the quantity of heating fuel demanded at every price.

Accepted Answer

A) True 
 B)False

Question 3

A change in the price of a good has no effect on the supply schedule.

Accepted Answer

A) True 
 B)False

Question 4

The U.S.government banned cigarette advertising on radio and television after January,1971.You would expect to find that after the ban took effect the price of magazine ads for

Accepted Answer

A) all goods fell. 
B) only cigarettes fell. 
C) all goods rose. 
D) only cigarettes rose. 
A) all goods fell. 
B) only cigarettes fell. 
C) all goods rose. 
D) only cigarettes rose.

Question 5

Price floors are only effective below the market equilibrium.

Accepted Answer

A) True 
 B)False

Question 6

In relation to prices that would prevail in an uncontrolled market,prices charged by a black market are usually

Accepted Answer

A) lower, since it is hard for the sellers to locate buyers. 
B) lower, since it is hard for the buyers to locate sellers. 
C) higher, since black marketers expect compensation for the risk of being caught. 
D) higher, since most people enjoy goods more if they are illegal. 
A) lower, since it is hard for the sellers to locate buyers. 
B) lower, since it is hard for the buyers to locate sellers. 
C) higher, since black marketers expect compensation for the risk of being caught. 
D) higher, since most people enjoy goods more if they are illegal.

Question 7

A supply curve can be thought of as

Accepted Answer

A) a graphical display of "market potential." 
B) a graphical representation of the information in a supply schedule. 
C) showing the maximum quantities that firms are able to produce. 
D) a forecasting tool. 
E) All of the above are correct. 
A) a graphical display of "market potential." 
B) a graphical representation of the information in a supply schedule. 
C) showing the maximum quantities that firms are able to produce. 
D) a forecasting tool. 
E) All of the above are correct.

Question 8

The demand for a textbook written by Schwarz and Mobley is Q = 20,000 - 50P; supply is Q = 2,000 + 100P.Students complain about the high price of textbooks,resulting in a price ceiling and,unfortunately,a shortage of texts.Below what price will shortages occur?

Accepted Answer

A shortage will occur if the price ceili

Question 9

Pork can be used to produce bacon or sausage,but not both.If the price of bacon rises for some reason,then,everything else equal,

Accepted Answer

A) the price of sausage will rise. 
B) the price of sausage will fall. 
C) the resources used in raising Pork will become more expensive. 
D) the resources used in raising Pork will become less expensive. 
A) the price of sausage will rise. 
B) the price of sausage will fall. 
C) the resources used in raising Pork will become more expensive. 
D) the resources used in raising Pork will become less expensive.

Question 10

Exhibit 4-1
The following are the equations for the supply and demand curves in the market for weezils:
 $\begin{array}{lccc}
  \text { Demand } & Q_{d}=20-2 F  \
 \text { Supply:} &  \mathrm{Q}_{s}=5+3 \mathrm{P} 
\end{array}$

where QS1U1B1dS1U1B0 is the quantity demanded, QS1U1B1sS1U1B0 is the quantity supplied, and P is the price per weezil in dollars.
-Refer to Exhibit 4-1.If consumers decide that they want 20 percent fewer weezils at every price,the equation for the new demand curve for weezils will be

Accepted Answer

A) Qd = 20 - 1.6P. 
B) Qd = 0.2(20 - 2P). 
C) Qd = 0.8(20 - 2P). 
D) Qd = 80(20 - 2P). 
A) Qd = 20 - 1.6P. 
B) Qd = 0.2(20 - 2P). 
C) Qd = 0.8(20 - 2P). 
D) Qd = 80(20 - 2P).

Question 11

If price rises,what happens to supply for a product?

Accepted Answer

A) It increases. 
B) It decreases. 
C) It does not change. 
D) Uncertain-economic theory has no answer to this question. 
A) It increases. 
B) It decreases. 
C) It does not change. 
D) Uncertain-economic theory has no answer to this question.

Question 12

Supply can shift due to changes in price.

Accepted Answer

A) True 
 B)False

Question 13

An increase in the price of poultry would lead to

Accepted Answer

A) a decrease in quantity demanded of fish and an increase in the demand for poultry. 
B) a decrease in quantity demanded of poultry and an increase in the demand for fish. 
C) an increase in quantity demanded of fish and a decrease in the demand for poultry. 
D) an increase in quantity demanded of poultry and a decrease in the demand for fish. 
A) a decrease in quantity demanded of fish and an increase in the demand for poultry. 
B) a decrease in quantity demanded of poultry and an increase in the demand for fish. 
C) an increase in quantity demanded of fish and a decrease in the demand for poultry. 
D) an increase in quantity demanded of poultry and a decrease in the demand for fish.

Question 14

A price ceiling is only effective if it is above the market equilibrium.

Accepted Answer

A) True 
 B)False

Question 15

Figure 4-14
  
-Frustrated by the cost and ineffectiveness of the war on drugs,the U.S.government could consider "decriminalization" of the use and sale of cocaine.Critics contend that lower prices will expand drug use and that decriminalization will remove the stigma and danger from arrest associated with drug use,thus further increasing the demand and number of addicts.Which graph in Figure 4-14 best illustrates the critics' case?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 16

To construct a supply curve,an economist needs data on price and quantity.Each point on the supply curve is

Accepted Answer

A) supply of the product. 
B) a quantity supplied at that price. 
C) the amount that people want to buy. 
D) the amount people want to sell to buyers of different incomes. 
E) All of the above are correct. 
A) supply of the product. 
B) a quantity supplied at that price. 
C) the amount that people want to buy. 
D) the amount people want to sell to buyers of different incomes. 
E) All of the above are correct.

Question 17

How does rent control tend to cause persistent imbalances in the market for housing?

Accepted Answer

A) Quantity demanded exceeds quantity supplied but price cannot rise to remove the shortage. 
B) Quantity demanded exceeds quantity supplied but price cannot fall to remove the surplus. 
C) Quantity supplied exceeds quantity demanded but price cannot rise to remove the shortage. 
D) Quantity supplied exceeds quantity demanded but price cannot fall to remove the surplus. 
A) Quantity demanded exceeds quantity supplied but price cannot rise to remove the shortage. 
B) Quantity demanded exceeds quantity supplied but price cannot fall to remove the surplus. 
C) Quantity supplied exceeds quantity demanded but price cannot rise to remove the shortage. 
D) Quantity supplied exceeds quantity demanded but price cannot fall to remove the surplus.

Question 18

Figure 4-20
  
-If there are empty seats at the university basketball game when the price per ticket is P*,then this situation can best be represented by which graph in Figure 4-20?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 19

Throughout history,governments have used price controls to

Accepted Answer

A) protect buyers. 
B) protect sellers. 
C) serve the "public interest." 
D) All of the above are correct. 
A) protect buyers. 
B) protect sellers. 
C) serve the "public interest." 
D) All of the above are correct.

Question 20

Along a supply curve,

Accepted Answer

A) supply changes as price changes. 
B) quantity supplied changes as price changes. 
C) supply changes as technology changes. 
D) quantity supplied changes as technology changes. 
A) supply changes as price changes. 
B) quantity supplied changes as price changes. 
C) supply changes as technology changes. 
D) quantity supplied changes as technology changes.

Price ceilings will likely result in the growth of black markets.

A cold winter will increase the quantity of heating fuel demanded at every price.

A change in the price of a good has no effect on the supply schedule.

The U.S.government banned cigarette advertising on radio and television after January,1971.You would expect to find that after the ban took effect the price of magazine ads for

Price floors are only effective below the market equilibrium.

In relation to prices that would prevail in an uncontrolled market,prices charged by a black market are usually

A supply curve can be thought of as

The demand for a textbook written by Schwarz and Mobley is Q = 20,000 - 50P; supply is Q = 2,000 + 100P.Students complain about the high price of textbooks,resulting in a price ceiling and,unfortunately,a shortage of texts.Below what price will shortages occur?

Pork can be used to produce bacon or sausage,but not both.If the price of bacon rises for some reason,then,everything else equal,

If price rises,what happens to supply for a product?

Supply can shift due to changes in price.

An increase in the price of poultry would lead to

A price ceiling is only effective if it is above the market equilibrium.

To construct a supply curve,an economist needs data on price and quantity.Each point on the supply curve is

How does rent control tend to cause persistent imbalances in the market for housing?

Figure 4-20 -If there are empty seats at the university basketball game when the price per ticket is P*,then this situation can best be represented by which graph in Figure 4-20?

Throughout history,governments have used price controls to

Along a supply curve,

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production,Inputs,and Cost: Building Blocks for Supply Analysis

Output,Price,and Profit: The Importance of Marginal Analysis

Securities: Business Finance,and the Economy: The Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets I: the Price System

The Shortcomings of Free Markets

The Markets Prime Achievement: Innovation and Growth

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: The Human Inputs

Poverty, Inequality, and Discrimination

International Trade and Comparative Advantage

Filters

Exam 4: Supply and Demand: An Initial Look

Price ceilings will likely result in the growth of black markets.

A cold winter will increase the quantity of heating fuel demanded at every price.

A change in the price of a good has no effect on the supply schedule.

The U.S.government banned cigarette advertising on radio and television after January,1971.You would expect to find that after the ban took effect the price of magazine ads for

Price floors are only effective below the market equilibrium.

In relation to prices that would prevail in an uncontrolled market,prices charged by a black market are usually

A supply curve can be thought of as

The demand for a textbook written by Schwarz and Mobley is Q = 20,000 - 50P; supply is Q = 2,000 + 100P.Students complain about the high price of textbooks,resulting in a price ceiling and,unfortunately,a shortage of texts.Below what price will shortages occur?

Pork can be used to produce bacon or sausage,but not both.If the price of bacon rises for some reason,then,everything else equal,

If price rises,what happens to supply for a product?

Supply can shift due to changes in price.

An increase in the price of poultry would lead to

A price ceiling is only effective if it is above the market equilibrium.

To construct a supply curve,an economist needs data on price and quantity.Each point on the supply curve is

How does rent control tend to cause persistent imbalances in the market for housing?

Figure 4-20 -If there are empty seats at the university basketball game when the price per ticket is P*,then this situation can best be represented by which graph in Figure 4-20?

Throughout history,governments have used price controls to

Along a supply curve,

What Is Economics

The Economy: Myth and Reality

The Fundamental Economic Problem: Scarcity and Choice

Consumer Choice: Individual and Market Demand

Demand and Elasticity

Production,Inputs,and Cost: Building Blocks for Supply Analysis

Output,Price,and Profit: The Importance of Marginal Analysis

Securities: Business Finance,and the Economy: The Tail That Wags the Dog

The Firm and the Industry Under Perfect Competition

Monopoly

Between Competition and Monopoly

Limiting Market Power: Regulation and Antitrust

The Case for Free Markets I: the Price System

The Shortcomings of Free Markets

The Markets Prime Achievement: Innovation and Growth

Externalities, the Environment, and Natural Resources

Taxation and Resource Allocation

Pricing the Factors of Production

Labor and Entrepreneurship: The Human Inputs

Poverty, Inequality, and Discrimination

International Trade and Comparative Advantage

Filters