Question 1

If supply decreases and demand increases,

Accepted Answer

A) the market clearing price definitely rises,and the equilibrium quantity falls. 
B) the market clearing price definitely rises,and the equilibrium quantity is indeterminate. 
C) the market clearing price definitely falls,and the effect on the equilibrium quantity is indeterminate. 
D) the effect on the market clearing price is indeterminate,and the equilibrium quantity definitely falls. 
A) the market clearing price definitely rises,and the equilibrium quantity falls. 
B) the market clearing price definitely rises,and the equilibrium quantity is indeterminate. 
C) the market clearing price definitely falls,and the effect on the equilibrium quantity is indeterminate. 
D) the effect on the market clearing price is indeterminate,and the equilibrium quantity definitely falls.

Question 2

All of the following are methods of rationing goods EXCEPT

Accepted Answer

A) political power. 
B) the profit motive. 
C) first come,first served. 
D) prices. 
A) political power. 
B) the profit motive. 
C) first come,first served. 
D) prices.

Question 3

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 4

In a city that has rent control for apartments,there is

Accepted Answer

A) less turnover of apartments. 
B) a surplus of apartments available to rent. 
C) a shortage of renters in the city. 
D) neither a surplus nor a shortage of apartments. 
A) less turnover of apartments. 
B) a surplus of apartments available to rent. 
C) a shortage of renters in the city. 
D) neither a surplus nor a shortage of apartments.

Question 5

Queuing is a way to ration goods

Accepted Answer

A) on a first-come,first-serve basis. 
B) through prices. 
C) through the use of political power. 
D) through markets. 
A) on a first-come,first-serve basis. 
B) through prices. 
C) through the use of political power. 
D) through markets.

Question 6

In some developing countries and in some former Communist countries ,people exchange their domestic currencies for foreign currencies such as the dollar in black markets.Why would this practice go on?

Accepted Answer

The country must have some restrictions

Question 7

A technological advancement has just occurred in the computer chip industry.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 8

Government policies such as price controls,rent controls,and quantity restrictions have the effect of

Accepted Answer

A) promoting the attainment of an unhindered market equilibrium. 
B) allowing quantity demanded to adjust to equality with aggregate supply. 
C) creating excess quantities demanded or excess quantities supplied. 
D) pushing prices to market clearing levels more rapidly than private market forces. 
A) promoting the attainment of an unhindered market equilibrium. 
B) allowing quantity demanded to adjust to equality with aggregate supply. 
C) creating excess quantities demanded or excess quantities supplied. 
D) pushing prices to market clearing levels more rapidly than private market forces.

Question 9

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 10

A severe drought has devastated cocoa plants,causing an increase in the price of chocolate.In the market for chocolate chip cookies,

Accepted Answer

A) a surplus will arise. 
B) supply has decreased and price has increased. 
C) quantity has decreased and price has decreased. 
D) quantity demanded has increased. 
A) a surplus will arise. 
B) supply has decreased and price has increased. 
C) quantity has decreased and price has decreased. 
D) quantity demanded has increased.

Question 11

Who bears the costs of a program to control rents at a maximum level?

Accepted Answer

A) Landlords or owners of housing units 
B) Consumers who face difficulty moving to a more suitable apartment 
C) Homeless who cannot find rental units 
D) All of these 
A) Landlords or owners of housing units 
B) Consumers who face difficulty moving to a more suitable apartment 
C) Homeless who cannot find rental units 
D) All of these

Question 12

-According to the above figure,the market clearing wage rate is

Accepted Answer

A)  $\mathrm { W } _ { \mathrm { e } }$ . 
B) Wm. 
C) We - Wm. 
D) Wm + We. 
A)  $\mathrm { W } _ { \mathrm { e } }$ . 
B) Wm. 
C) We - Wm. 
D) Wm + We.

Question 13

Instituting a rent control program will most likely lead to

Accepted Answer

A) a shortage of rental units. 
B) overly elaborate and expensive construction. 
C) an efficient allocation of existing units among consumers. 
D) an excess quantity supplied of rental units. 
A) a shortage of rental units. 
B) overly elaborate and expensive construction. 
C) an efficient allocation of existing units among consumers. 
D) an excess quantity supplied of rental units.

Question 14

Another term for intermediaries who specialize in reducing transaction costs is

Accepted Answer

A) service providers. 
B) consultants. 
C) middlemen. 
D) revenue agents. 
A) service providers. 
B) consultants. 
C) middlemen. 
D) revenue agents.

Question 15

-Refer to the above figure.If a price floor 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 16

The price system has

Accepted Answer

A) prices fixed by the government. 
B) prices fixed by the seller. 
C) voluntary exchange. 
D) prices fixed by the producer. 
A) prices fixed by the government. 
B) prices fixed by the seller. 
C) voluntary exchange. 
D) prices fixed by the producer.

Question 17

When supply and demand for a product decrease simultaneously,we

Accepted Answer

A) can predict that both equilibrium price and quantity will increase. 
B) can predict that both equilibrium price and quantity will decrease. 
C) cannot predict equilibrium price,but know that equilibrium quantity will decrease. 
D) cannot predict the change in either the equilibrium quantity or equilibrium price. 
A) can predict that both equilibrium price and quantity will increase. 
B) can predict that both equilibrium price and quantity will decrease. 
C) cannot predict equilibrium price,but know that equilibrium quantity will decrease. 
D) cannot predict the change in either the equilibrium quantity or equilibrium price.

Question 18

If demand increases and supply decreases,

Accepted Answer

A) the market clearing price definitely will increase,and the equilibrium quantity definitely will increase. 
B) the market clearing price definitely will increase,and the equilibrium quantity definitely will decrease. 
C) the market clearing price definitely will increase,but the change in the equilibrium quantity cannot be determined without more information. 
D) the equilibrium quantity definitely will decrease,but the change in the market clearing price cannot be determined without more information. 
A) the market clearing price definitely will increase,and the equilibrium quantity definitely will increase. 
B) the market clearing price definitely will increase,and the equilibrium quantity definitely will decrease. 
C) the market clearing price definitely will increase,but the change in the equilibrium quantity cannot be determined without more information. 
D) the equilibrium quantity definitely will decrease,but the change in the market clearing price cannot be determined without more information.

Question 19

The difference between the total amount that producers would have been willing to accept for the total quantity produced in a market and what they actually received at the market clearing price is called

Accepted Answer

A) production excess. 
B) excess demand. 
C) market surplus. 
D) producer surplus. 
A) production excess. 
B) excess demand. 
C) market surplus. 
D) producer surplus.

Question 20

More farmers have recently entered the corn industry.In addition there has been a technological advancement in the fertilizer industry providing corn farmers with a cheaper and a more effective fertilizer.In the market for corn,the effects these changes will have on the equilibrium price and quantity are:

Accepted Answer

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

If supply decreases and demand increases,

All of the following are methods of rationing goods EXCEPT

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

In a city that has rent control for apartments,there is

Queuing is a way to ration goods

In some developing countries and in some former Communist countries ,people exchange their domestic currencies for foreign currencies such as the dollar in black markets.Why would this practice go on?

A technological advancement has just occurred in the computer chip industry.In the computer chip market this will lead to

Government policies such as price controls,rent controls,and quantity restrictions have the effect of

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

A severe drought has devastated cocoa plants,causing an increase in the price of chocolate.In the market for chocolate chip cookies,

Who bears the costs of a program to control rents at a maximum level?

-According to the above figure,the market clearing wage rate is

Instituting a rent control program will most likely lead to

Another term for intermediaries who specialize in reducing transaction costs is

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

The price system has

When supply and demand for a product decrease simultaneously,we

If demand increases and supply decreases,

The difference between the total amount that producers would have been willing to accept for the total quantity produced in a market and what they actually received at the market clearing price is called

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

If supply decreases and demand increases,

All of the following are methods of rationing goods EXCEPT

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

In a city that has rent control for apartments,there is

Queuing is a way to ration goods

In some developing countries and in some former Communist countries ,people exchange their domestic currencies for foreign currencies such as the dollar in black markets.Why would this practice go on?

A technological advancement has just occurred in the computer chip industry.In the computer chip market this will lead to

Government policies such as price controls,rent controls,and quantity restrictions have the effect of

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

A severe drought has devastated cocoa plants,causing an increase in the price of chocolate.In the market for chocolate chip cookies,

Who bears the costs of a program to control rents at a maximum level?

-According to the above figure,the market clearing wage rate is

Instituting a rent control program will most likely lead to

Another term for intermediaries who specialize in reducing transaction costs is

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

The price system has

When supply and demand for a product decrease simultaneously,we

If demand increases and supply decreases,

The difference between the total amount that producers would have been willing to accept for the total quantity produced in a market and what they actually received at the market clearing price is called

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