Question 1

-Refer to the above figure.If the government imposes a price floor of $60,

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 2

We cannot predict the effect on the equilibrium quantity,but know that the market clearing price will decrease when

Accepted Answer

A) supply increases and demand decreases. 
B) supply decreases and demand increases. 
C) supply decreases and at the same time demand increases. 
D) supply increases and at the same time demand decreases. 
A) supply increases and demand decreases. 
B) supply decreases and demand increases. 
C) supply decreases and at the same time demand increases. 
D) supply increases and at the same time demand decreases.

Question 3

Economists assume that when there is a change in supply and/or demand,the market clearing price returns to the equilibrium

Accepted Answer

A) quickly. 
B) slowly. 
C) after a protracted negotiation process. 
D) after an adjustment period. 
A) quickly. 
B) slowly. 
C) after a protracted negotiation process. 
D) after an adjustment period.

Question 4

-Refer to the above figure.A price control has been set which has led to a shortage.This means that a

Accepted Answer

A) price ceiling has been set at $P _ { 1 }$ . 
B) price floor has been set at $P _ { 1 }$ . 
C) price ceiling has been set at $P _ { 2 }$ . 
D) price floor has been set at $P _ { 2 }$ . 
A) price ceiling has been set at $P _ { 1 }$ . 
B) price floor has been set at $P _ { 1 }$ . 
C) price ceiling has been set at $P _ { 2 }$ . 
D) price floor has been set at $P _ { 2 }$ .

Question 5

The market system is also called the price system because

Accepted Answer

A) rising prices are the signal to producers to offer more of a particular good. 
B) people pay money in markets. 
C) everything has a price tag. 
D) inflation is a significant problem. 
A) rising prices are the signal to producers to offer more of a particular good. 
B) people pay money in markets. 
C) everything has a price tag. 
D) inflation is a significant problem.

Question 6

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

Accepted Answer

A) a surplus will develop. 
B) a shortage will develop. 
C) the equilibrium price will be maintained. 
D) a price ceiling will follow. 
A) a surplus will develop. 
B) a shortage will develop. 
C) the equilibrium price will be maintained. 
D) a price ceiling will follow.

Question 7

The effect of legislation establishing a minimum wage above the market clearing wage is

Accepted Answer

A) unemployment. 
B) a shortage of labor. 
C) higher wages for all workers. 
D) a shift of the demand for labor curve. 
A) unemployment. 
B) a shortage of labor. 
C) higher wages for all workers. 
D) a shift of the demand for labor curve.

Question 8

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 9

When the supply and/or demand curve shift,the new market clearing price is

Accepted Answer

A) reached instantaneously. 
B) reached only after the government intervenes in the market. 
C) reached after some period of adjustment. 
D) never reached. 
A) reached instantaneously. 
B) reached only after the government intervenes in the market. 
C) reached after some period of adjustment. 
D) never reached.

Question 10

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 11

Suppose new research shows that soy milk and other products derived from soybeans provide more health benefits than previously thought.At the same time,drought conditions result in extensive damage to the soybean crop.What will be the combined impact of these two factors on the equilibrium price and quantity of soybeans?

Accepted Answer

A) Price will decrease,but the effect on quantity is indeterminate. 
B) Price will increase,but the effect on quantity is indeterminate. 
C) Quantity will decrease,but the effect on price is indeterminate. 
D) Quantity will increase,but the effect on price is indeterminate. 
A) Price will decrease,but the effect on quantity is indeterminate. 
B) Price will increase,but the effect on quantity is indeterminate. 
C) Quantity will decrease,but the effect on price is indeterminate. 
D) Quantity will increase,but the effect on price is indeterminate.

Question 12

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

Accepted Answer

A) the quantity sold would be 80 units. 
B) there would be a surplus of 40 units. 
C) there would be a shortage of 40 units. 
D) there would be a shortage of 20 units. 
A) the quantity sold would be 80 units. 
B) there would be a surplus of 40 units. 
C) there would be a shortage of 40 units. 
D) there would be a shortage of 20 units.

Question 13

Which of the following is a possible outcome of setting a legal maximum rental rate below the market clearing rental rate?

Accepted Answer

A) an increase in the quantity of rental housing supplied 
B) a decrease in the quantity of rental housing demanded 
C) a black market in rental housing 
D) a surplus of rental housing 
A) an increase in the quantity of rental housing supplied 
B) a decrease in the quantity of rental housing demanded 
C) a black market in rental housing 
D) a surplus of rental housing

Question 14

The long-run effect of rent control on an area includes

Accepted Answer

A) rampant building of new low-income housing. 
B) many new luxury apartments new luxury apartments will be built. 
C) new investors into the real estate market in the area. 
D) less investment into the real estate market in the area. 
A) rampant building of new low-income housing. 
B) many new luxury apartments new luxury apartments will be built. 
C) new investors into the real estate market in the area. 
D) less investment into the real estate market in the area.

Question 15

-Refer to the above figure.A price control has been set which has led to a surplus.This means that a

Accepted Answer

A) price ceiling has been set at $P _ { 1 }$ . 
B) price floor has been set at $P _ { 1 }$ . 
C) price ceiling has been set at $P _ { 2 }$ . 
D) price floor has been set at $P _ { 2 }$ . 
A) price ceiling has been set at $P _ { 1 }$ . 
B) price floor has been set at $P _ { 1 }$ . 
C) price ceiling has been set at $P _ { 2 }$ . 
D) price floor has been set at $P _ { 2 }$ .

Question 16

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 17

The economy is undergoing a recession that has reduced consumers' incomes.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 18

If the government sets a minimum price at which a good or service can be sold,it thereby creates

Accepted Answer

A) a price ceiling. 
B) a black market price. 
C) a price floor. 
D) an illegal price control. 
A) a price ceiling. 
B) a black market price. 
C) a price floor. 
D) an illegal price control.

Question 19

A maximum legal price that may be charged for a particular good or service is known as a

Accepted Answer

A) price floor. 
B) price ceiling. 
C) black market. 
D) price support. 
A) price floor. 
B) price ceiling. 
C) black market. 
D) price support.

Question 20

Which one of the following statements is true?

Accepted Answer

A) An effective price ceiling results in a surplus of the good. 
B) An effective price floor results in a shortage of the good. 
C) When the market clearing price of a good is the equilibrium,then everyone can afford it. 
D) The market clearing price of a good reflects its relative scarcity. 
A) An effective price ceiling results in a surplus of the good. 
B) An effective price floor results in a shortage of the good. 
C) When the market clearing price of a good is the equilibrium,then everyone can afford it. 
D) The market clearing price of a good reflects its relative scarcity.

-Refer to the above figure.If the government imposes a price floor of $60,

We cannot predict the effect on the equilibrium quantity,but know that the market clearing price will decrease when

Economists assume that when there is a change in supply and/or demand,the market clearing price returns to the equilibrium

-Refer to the above figure.A price control has been set which has led to a shortage.This means that a

The market system is also called the price system because

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

The effect of legislation establishing a minimum wage above the market clearing wage is

In the price system,

When the supply and/or demand curve shift,the new market clearing price is

An effective rent control will

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

Which of the following is a possible outcome of setting a legal maximum rental rate below the market clearing rental rate?

The long-run effect of rent control on an area includes

-Refer to the above figure.A price control has been set which has led to a surplus.This means that a

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

The economy is undergoing a recession that has reduced consumers' incomes.In the computer chip market,this will lead to

If the government sets a minimum price at which a good or service can be sold,it thereby creates

A maximum legal price that may be charged for a particular good or service is known as a

Which one of the following statements is true?

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Public Spending and Public Choice

Funding the Public Sector

Demand and Supply Elasticity

Consumer Choice

Rents, profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

Exam 3: Extensions of Demand and Supply Analysis

-Refer to the above figure.If the government imposes a price floor of $60,

We cannot predict the effect on the equilibrium quantity,but know that the market clearing price will decrease when

Economists assume that when there is a change in supply and/or demand,the market clearing price returns to the equilibrium

-Refer to the above figure.A price control has been set which has led to a shortage.This means that a

The market system is also called the price system because

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

The effect of legislation establishing a minimum wage above the market clearing wage is

In the price system,

When the supply and/or demand curve shift,the new market clearing price is

An effective rent control will

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

Which of the following is a possible outcome of setting a legal maximum rental rate below the market clearing rental rate?

The long-run effect of rent control on an area includes

-Refer to the above figure.A price control has been set which has led to a surplus.This means that a

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

The economy is undergoing a recession that has reduced consumers' incomes.In the computer chip market,this will lead to

If the government sets a minimum price at which a good or service can be sold,it thereby creates

A maximum legal price that may be charged for a particular good or service is known as a

Which one of the following statements is true?

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Public Spending and Public Choice

Funding the Public Sector

Demand and Supply Elasticity

Consumer Choice

Rents, profits, and the Financial Environment of Business

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters