Question 1

The difference between quantity restrictions and price ceilings as to their effect on the market is that

Accepted Answer

A) only price ceilings make the market inefficient. 
B) only quantity restrictions make the market inefficient. 
C) while some consumers gain from price ceilings,no consumers gain from quantity restrictions. 
D) while price ceilings are efficient,quantity restrictions are not. 
A) only price ceilings make the market inefficient. 
B) only quantity restrictions make the market inefficient. 
C) while some consumers gain from price ceilings,no consumers gain from quantity restrictions. 
D) while price ceilings are efficient,quantity restrictions are not.

Question 2

A price ceiling set above the equilibrium price will cause which of the following?

Accepted Answer

A) an increase in supply 
B) a surplus 
C) a shortage 
D) no effect on either the price or quantity 
A) an increase in supply 
B) a surplus 
C) a shortage 
D) no effect on either the price or quantity

Question 3

When the government establishes a minimum price for an agricultural product above the equilibrium price,the government is creating a(n)

Accepted Answer

A) price ceiling. 
B) elevated price. 
C) price floor. 
D) surplus price. 
A) price ceiling. 
B) elevated price. 
C) price floor. 
D) surplus price.

Question 4

Garbanzo Beans $$\begin{array} { l c c } 
\text { Price } & \mathbf { Q } _ { \mathbf { d } } & \mathbf { Q } _ { \mathbf { s } } \
\hline \$ 2 & 5,000 & 1,000 \
\$ 4 & 4,000 & 2,000 \
\$ 6 & 3,000 & 3,000 \
\$ 8 & 2,000 & 4,000 \
\$ 10 & 1,000 & 5,000
\end{array}$$
-Consider the above table.Assuming the government imposes a price floor on garbanzo beans of $8,what would be the likely result?

Accepted Answer

A) a surplus of 2000 garbanzo beans 
B) a shortage of 2000 garbanzo beans 
C) no change,equilibrium would prevail 
D) The quantity demanded of garbanzo beans would fall to zero. 
A) a surplus of 2000 garbanzo beans 
B) a shortage of 2000 garbanzo beans 
C) no change,equilibrium would prevail 
D) The quantity demanded of garbanzo beans would fall to zero.

Question 5

Assume that CDs are a normal good and that the price of stereo equipment falls while the labor costs of producing CDs increase.What will happen in the market for CDs?

Accepted Answer

Since stereo equipment is a complementar

Question 6

-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 $P _ { 1 }$ . 
B) at $P _ { 1 }$ . 
C) at $P _ { 2 }$ . 
D) at $\mathrm { P } _ { 3 }$ . 
A) below $P _ { 1 }$ . 
B) at $P _ { 1 }$ . 
C) at $P _ { 2 }$ . 
D) at $\mathrm { P } _ { 3 }$ .

Question 7

According to the text,during World War II rationing was conducted in the U.S.through the use of

Accepted Answer

A) queuing. 
B) lotteries. 
C) coupons. 
D) sharing. 
A) queuing. 
B) lotteries. 
C) coupons. 
D) sharing.

Question 8

Suppose we observe the following two simultaneous events in the market for beef.First,there is a decrease in the demand for beef due to changes in consumer tastes.And second,there is a reduction in supply due to cattle farmers selling their land to real estate developers.We know with certainty that these two simultaneous events will cause which of the following?

Accepted Answer

A) no change in the equilibrium quantity and a reduction in the equilibrium price 
B) an increase in the equilibrium quantity and in the equilibrium price 
C) a decrease in the equilibrium quantity and an indeterminate change in the equilibrium price 
D) a decrease in the equilibrium quantity and an increase in the equilibrium price 
A) no change in the equilibrium quantity and a reduction in the equilibrium price 
B) an increase in the equilibrium quantity and in the equilibrium price 
C) a decrease in the equilibrium quantity and an indeterminate change in the equilibrium price 
D) a decrease in the equilibrium quantity and an increase in the equilibrium price

Question 9

If an excess quantity of labor demanded exists in a free market,there is a tendency for

Accepted Answer

A) quantity supplied to rise. 
B) the wage rate to fall. 
C) quantity demanded to fall. 
D) the wage rate to rise. 
A) quantity supplied to rise. 
B) the wage rate to fall. 
C) quantity demanded to fall. 
D) the wage rate to rise.

Question 10

Suppose that there is an improvement in technology in the market for iPhones.Which of the following is true?

Accepted Answer

A) Supply will increase and the market clearing price will fall. 
B) Supply will increase and the market clearing price will rise. 
C) Demand will increase and the market clearing price will rise. 
D) Demand will increase and the market clearing price will fall. 
A) Supply will increase and the market clearing price will fall. 
B) Supply will increase and the market clearing price will rise. 
C) Demand will increase and the market clearing price will rise. 
D) Demand will increase and the market clearing price will fall.

Question 11

-Refer to the above figure.A price ceiling has been set at $P _ { 1 }$ ,and a black market has opened.The equilibrium black market price will be

Accepted Answer

A) below $P _ { 1 }$ 
B) between $P _ { 1 }$ and
$\mathrm { P } _ { 3 }$ 
C) above $\mathrm { P } _ { 3 }$ 
D)  $P _ { 2 }$ 
A) below $P _ { 1 }$ 
B) between $P _ { 1 }$ and
$\mathrm { P } _ { 3 }$ 
C) above $\mathrm { P } _ { 3 }$ 
D)  $P _ { 2 }$

Question 12

The rationing function of prices refers to

Accepted Answer

A) the situation when government must intervene in a market when there is a large shortage or surplus. 
B) the synchronization of decisions by buyers and sellers that leads to an equilibrium. 
C) the synchronization of decisions by buyers and sellers through the direction of government agencies. 
D) the situation when only the rich get the goods they want. 
A) the situation when government must intervene in a market when there is a large shortage or surplus. 
B) the synchronization of decisions by buyers and sellers that leads to an equilibrium. 
C) the synchronization of decisions by buyers and sellers through the direction of government agencies. 
D) the situation when only the rich get the goods they want.

Question 13

As compared to the market clearing price,the total amount of consumer surplus and producer surplus is

Accepted Answer

A) greater for a government-imposed price floor that is higher than that market clearing price. 
B) greater for a government-imposed price ceiling that is lower than that market clearing price. 
C) the same as a government-imposed price floor that is higher than that market clearing price. 
D) smaller for a government-imposed price ceiling that is lower than that market clearing price. 
A) greater for a government-imposed price floor that is higher than that market clearing price. 
B) greater for a government-imposed price ceiling that is lower than that market clearing price. 
C) the same as a government-imposed price floor that is higher than that market clearing price. 
D) smaller for a government-imposed price ceiling that is lower than that market clearing price.

Question 14

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 15

Prices provide the rationing function best when

Accepted Answer

A) prices are flexible. 
B) prices are inflexible. 
C) they are used in conjunction with queuing. 
D) price controls are in place and ration coupons are used too. 
A) prices are flexible. 
B) prices are inflexible. 
C) they are used in conjunction with queuing. 
D) price controls are in place and ration coupons are used too.

Question 16

Which of the following statement is false?

Accepted Answer

A) Only the price system can be used to ration goods. 
B) Random assignment can be a method of rationing. 
C) Coupons can be used to ration goods. 
D) Queuing can be used for rationing. 
A) Only the price system can be used to ration goods. 
B) Random assignment can be a method of rationing. 
C) Coupons can be used to ration goods. 
D) Queuing can be used for rationing.

Question 17

Buyers and sellers receive signals from markets

Accepted Answer

A) by listening to the TV news programs. 
B) through the price system. 
C) from the gossip columns in the newspapers. 
D) from their friends and acquaintances. 
A) by listening to the TV news programs. 
B) through the price system. 
C) from the gossip columns in the newspapers. 
D) from their friends and acquaintances.

Question 18

When import quotas are imposed by a government,

Accepted Answer

A) the domestic producers always lower the prices of their products to ensure that their products are sold. 
B) the government is trying to discourage consumers from buying foreign-made goods. 
C) the supply of the product on the domestic market increases. 
D) the price ceiling for the product has to be lowered. 
A) the domestic producers always lower the prices of their products to ensure that their products are sold. 
B) the government is trying to discourage consumers from buying foreign-made goods. 
C) the supply of the product on the domestic market increases. 
D) the price ceiling for the product has to be lowered.

Question 19

A change in an equilibrium price can result from
I.A change in demand
II.A change in supply

Accepted Answer

A) I only 
B) II only 
C) Both I and II 
D) Neither I nor II 
A) I only 
B) II only 
C) Both I and II 
D) Neither I nor II

Question 20

Price ceilings are adopted in most cases because

Accepted Answer

A) the government views the current equilibrium price as too high for consumers. 
B) the government wants to create surpluses. 
C) the government favors a non-intervention policy. 
D) producers need incentives to produce more of the good or service. 
A) the government views the current equilibrium price as too high for consumers. 
B) the government wants to create surpluses. 
C) the government favors a non-intervention policy. 
D) producers need incentives to produce more of the good or service.

The difference between quantity restrictions and price ceilings as to their effect on the market is that

A price ceiling set above the equilibrium price will cause which of the following?

When the government establishes a minimum price for an agricultural product above the equilibrium price,the government is creating a(n)

Garbanzo Beans Price \ 2 5,000 1,000 \ 4 4,000 2,000 \ 6 3,000 3,000 \ 8 2,000 4,000 \ 10 1,000 5,000 -Consider the above table.Assuming the government imposes a price floor on garbanzo beans of $8,what would be the likely result?

Assume that CDs are a normal good and that the price of stereo equipment falls while the labor costs of producing CDs increase.What will happen in the market for CDs?

-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

According to the text,during World War II rationing was conducted in the U.S.through the use of

If an excess quantity of labor demanded exists in a free market,there is a tendency for

Suppose that there is an improvement in technology in the market for iPhones.Which of the following is true?

$-Refer to the above figure.A price ceiling has been set at P _ { 1 } ,and a black market has opened.The equilibrium black market price will be$ -Refer to the above figure.A price ceiling has been set at $P _ { 1 }$ ,and a black market has opened.The equilibrium black market price will be

The rationing function of prices refers to

As compared to the market clearing price,the total amount of consumer surplus and producer surplus is

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

Prices provide the rationing function best when

Which of the following statement is false?

Buyers and sellers receive signals from markets

When import quotas are imposed by a government,

A change in an equilibrium price can result from I.A change in demand II.A change in supply

Price ceilings are adopted in most cases because

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

The difference between quantity restrictions and price ceilings as to their effect on the market is that

A price ceiling set above the equilibrium price will cause which of the following?

When the government establishes a minimum price for an agricultural product above the equilibrium price,the government is creating a(n)

Garbanzo Beans Price \ 2 5,000 1,000 \ 4 4,000 2,000 \ 6 3,000 3,000 \ 8 2,000 4,000 \ 10 1,000 5,000 -Consider the above table.Assuming the government imposes a price floor on garbanzo beans of $8,what would be the likely result?

Assume that CDs are a normal good and that the price of stereo equipment falls while the labor costs of producing CDs increase.What will happen in the market for CDs?

-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

According to the text,during World War II rationing was conducted in the U.S.through the use of

If an excess quantity of labor demanded exists in a free market,there is a tendency for

Suppose that there is an improvement in technology in the market for iPhones.Which of the following is true?

-Refer to the above figure.A price ceiling has been set at P1P _ { 1 }P1​ ,and a black market has opened.The equilibrium black market price will be

The rationing function of prices refers to

As compared to the market clearing price,the total amount of consumer surplus and producer surplus is

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

Prices provide the rationing function best when

Which of the following statement is false?

Buyers and sellers receive signals from markets

When import quotas are imposed by a government,

A change in an equilibrium price can result from I.A change in demand II.A change in supply

Price ceilings are adopted in most cases because

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

$-Refer to the above figure.A price ceiling has been set at P _ { 1 } ,and a black market has opened.The equilibrium black market price will be$ -Refer to the above figure.A price ceiling has been set at $P _ { 1 }$ ,and a black market has opened.The equilibrium black market price will be