Question 1

Which of the following must occur as a result of ceilings on apartment rents that are set below market clearing rental rates?

Accepted Answer

A) Property owners respond to the ceilings by increasing maintenance and repairs. 
B) Property owners respond to the ceilings by constructing new apartment buildings. 
C) There is a decrease in the quantity of apartments that prospective tenants wish to rent. 
D) There is a decrease in the quantity of apartments that property owners offer for rent. 
A) Property owners respond to the ceilings by increasing maintenance and repairs. 
B) Property owners respond to the ceilings by constructing new apartment buildings. 
C) There is a decrease in the quantity of apartments that prospective tenants wish to rent. 
D) There is a decrease in the quantity of apartments that property owners offer for rent.

Question 2

The rationing function of prices means that

Accepted Answer

A) government is responsible for setting the prices of basic foods. 
B) all goods and services are produced by large firms. 
C) businesses determine what goods consumers should purchase. 
D) buyers and sellers synchronize their decisions through the price system. 
A) government is responsible for setting the prices of basic foods. 
B) all goods and services are produced by large firms. 
C) businesses determine what goods consumers should purchase. 
D) buyers and sellers synchronize their decisions through the price system.

Question 3

The adverse effects of rent controls include

Accepted Answer

A) keeping rental rates too high in a normal market. 
B) excessive construction of new rental housing. 
C) reduced incentive to construct new rental housing. 
D) increased incentives for people to purchase their own homes. 
A) keeping rental rates too high in a normal market. 
B) excessive construction of new rental housing. 
C) reduced incentive to construct new rental housing. 
D) increased incentives for people to purchase their own homes.

Question 4

In the housing market,rents serve the purpose of

Accepted Answer

A) making landlords rich. 
B) rationing the availability of existing housing. 
C) providing an entry by the government into the housing market. 
D) increasing tax collections by the community. 
A) making landlords rich. 
B) rationing the availability of existing housing. 
C) providing an entry by the government into the housing market. 
D) increasing tax collections by the community.

Question 5

The prices of certain goods,such as ice and gasoline,often increase after a natural disaster such as a hurricane.The economic explanation for this observation is that

Accepted Answer

A) people panic in disaster situations. 
B) disasters bring out the worst in people. 
C) the disaster temporarily reduces the supply of the goods and increases the demand for the goods. 
D) the disaster temporarily reduces the supply of the goods and reduces the demand for the goods. 
A) people panic in disaster situations. 
B) disasters bring out the worst in people. 
C) the disaster temporarily reduces the supply of the goods and increases the demand for the goods. 
D) the disaster temporarily reduces the supply of the goods and reduces the demand for the goods.

Question 6

The income of consumers increases.and the wage rate in the DVD industry increases.As a result,

Accepted Answer

A) the price of DVDs stays the same and the quantity sold can either increase or decrease,depending on whether the change in demand is greater than the change in supply. 
B) the price of DVDs increases and the quantity sold can either increase,decrease or stay the same depending on whether the change in demand was greater than the change in supply. 
C) the equilibrium quantity sold increases and price can either increase or decrease,depending on whether the change in demand is greater than the change in supply. 
D) the equilibrium quantity sold can either increase or decrease and the price can either increase or decrease,depending on whether the change in demand was greater than the change in supply. 
A) the price of DVDs stays the same and the quantity sold can either increase or decrease,depending on whether the change in demand is greater than the change in supply. 
B) the price of DVDs increases and the quantity sold can either increase,decrease or stay the same depending on whether the change in demand was greater than the change in supply. 
C) the equilibrium quantity sold increases and price can either increase or decrease,depending on whether the change in demand is greater than the change in supply. 
D) the equilibrium quantity sold can either increase or decrease and the price can either increase or decrease,depending on whether the change in demand was greater than the change in supply.

Question 7

Suppose that initially a market is in equilibrium at a price of $10 and a quantity of 5000 units per day.Several months later,the market is in a new equilibrium at a price of $5 and a quantity of 5000 units per day.What happened in the market?

Accepted Answer

For price to fall,either demand had to d

Question 8

Rent controls are an example of a

Accepted Answer

A) price floor. 
B) price ceiling. 
C) price floor for the consumer and a price ceiling for the producer. 
D) nonprice rationing device. 
A) price floor. 
B) price ceiling. 
C) price floor for the consumer and a price ceiling for the producer. 
D) nonprice rationing device.

Question 9

Which rationing system leads to the most efficient use of available resources?

Accepted Answer

A) free market 
B) physical force 
C) first come,first served 
D) random assignment 
A) free market 
B) physical force 
C) first come,first served 
D) random assignment

Question 10

Which of these would NOT be considered a middleman in a market?

Accepted Answer

A) A produce wholesaler 
B) An apple farmer 
C) A smartphone retailer 
D) A fruit distributor 
A) A produce wholesaler 
B) An apple farmer 
C) A smartphone retailer 
D) A fruit distributor

Question 11

With respect to the market clearing price and the equilibrium quantity of good X,increases in the demand for and the supply of good X will definitely

Accepted Answer

A) increase the market clearing price of good X but have an uncertain impact on the equilibrium quantity of X. 
B) reduce the market clearing price and the equilibrium quantity of good X. 
C) increase the market clearing price and the equilibrium quantity of good X. 
D) increase the equilibrium quantity of good X but have an uncertain impact on the market clearing price of X. 
A) increase the market clearing price of good X but have an uncertain impact on the equilibrium quantity of X. 
B) reduce the market clearing price and the equilibrium quantity of good X. 
C) increase the market clearing price and the equilibrium quantity of good X. 
D) increase the equilibrium quantity of good X but have an uncertain impact on the market clearing price of X.

Question 12

-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?

Accepted Answer

A) Only quantity supplied has increased. 
B) Only quantity demanded has decreased. 
C) Supply has increased. 
D) Supply has decreased. 
A) Only quantity supplied has increased. 
B) Only quantity demanded has decreased. 
C) Supply has increased. 
D) Supply has decreased.

Question 13

Rent controls primarily benefit

Accepted Answer

A) property owners. 
B) people looking for rental units. 
C) builders. 
D) people who already occupy rental units. 
A) property owners. 
B) people looking for rental units. 
C) builders. 
D) people who already occupy rental units.

Question 14

-Refer to the above figure.A minimum wage has been set at $\mathrm { W } _ { \mathrm { M } }$ .The amount of unemployment is

Accepted Answer

A) zero. 
B) at $\mathrm { Q } _ { \mathrm { e } }$ . 
C)  $\mathrm { Q } _ { \mathrm { S } }$ minus $\mathrm { Q } _ { \mathrm { D } }$ . 
D) not computable from the information given. 
A) zero. 
B) at $\mathrm { Q } _ { \mathrm { e } }$ . 
C)  $\mathrm { Q } _ { \mathrm { S } }$ minus $\mathrm { Q } _ { \mathrm { D } }$ . 
D) not computable from the information given.

Question 15

Suppose that consumer income decreases and that hamburger is an inferior good.Which of the following will occur in the market for hamburger?

Accepted Answer

A) Market clearing price will rise,and equilibrium quantity will rise. 
B) Market clearing price will fall,and equilibrium quantity will fall. 
C) Market clearing price will rise,and equilibrium quantity will fall. 
D) Market clearing price will fall,and equilibrium quantity will rise. 
A) Market clearing price will rise,and equilibrium quantity will rise. 
B) Market clearing price will fall,and equilibrium quantity will fall. 
C) Market clearing price will rise,and equilibrium quantity will fall. 
D) Market clearing price will fall,and equilibrium quantity will rise.

Question 16

Minimum wages are examples of

Accepted Answer

A) a price floor. 
B) a price ceiling. 
C) the rationing function of prices not working. 
D) government increasing the demand for certain products. 
A) a price floor. 
B) a price ceiling. 
C) the rationing function of prices not working. 
D) government increasing the demand for certain products.

Question 17

Which of the following statements is most accurate regarding who benefits and loses from establishment of a minimum wage above the market clearing wage?

Accepted Answer

A) Individuals who obtain jobs benefit because they earn a higher wage,but some individuals lose because employers will not hire them at the minimum wage. 
B) All workers benefit equally from the establishment of the minimum wage because just as many workers as before remain employed,and all earn the higher minimum wage. 
C) All employers benefit equally from the establishment of the minimum wage because they are able to hire fewer workers at a lower wage. 
D) All employers lose because they must pay the higher minimum wage to the same number of employees as they did before the minimum wage was established. 
A) Individuals who obtain jobs benefit because they earn a higher wage,but some individuals lose because employers will not hire them at the minimum wage. 
B) All workers benefit equally from the establishment of the minimum wage because just as many workers as before remain employed,and all earn the higher minimum wage. 
C) All employers benefit equally from the establishment of the minimum wage because they are able to hire fewer workers at a lower wage. 
D) All employers lose because they must pay the higher minimum wage to the same number of employees as they did before the minimum wage was established.

Question 18

In a market system,which component conveys information about what is relatively scarce and what is relatively abundant?

Accepted Answer

A) The number of producers 
B) The number of consumers 
C) Prices 
D) The amount of government regulation 
A) The number of producers 
B) The number of consumers 
C) Prices 
D) The amount of government regulation

Question 19

A price ceiling is

Accepted Answer

A) the lowest price a seller can charge without losing all of its customers. 
B) a legal minimum price below which a good or service cannot be sold. 
C) a legal price above which a good or service cannot be sold. 
D) a nonprice rationing device. 
A) the lowest price a seller can charge without losing all of its customers. 
B) a legal minimum price below which a good or service cannot be sold. 
C) a legal price above which a good or service cannot be sold. 
D) a nonprice rationing device.

Question 20

In the automobile industry,workers have just negotiated a new contract giving workers a large raise.There has also been an increase in the number of licensed drivers who are in the market for a new car.In the market for new automobiles,the effects that 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.

Which of the following must occur as a result of ceilings on apartment rents that are set below market clearing rental rates?

The rationing function of prices means that

The adverse effects of rent controls include

In the housing market,rents serve the purpose of

The prices of certain goods,such as ice and gasoline,often increase after a natural disaster such as a hurricane.The economic explanation for this observation is that

The income of consumers increases.and the wage rate in the DVD industry increases.As a result,

Suppose that initially a market is in equilibrium at a price of $10 and a quantity of 5000 units per day.Several months later,the market is in a new equilibrium at a price of $5 and a quantity of 5000 units per day.What happened in the market?

Rent controls are an example of a

Which rationing system leads to the most efficient use of available resources?

Which of these would NOT be considered a middleman in a market?

With respect to the market clearing price and the equilibrium quantity of good X,increases in the demand for and the supply of good X will definitely

-Refer to the above figure.Suppose that the supply curve shifts from S_A to S_B while the demand curve remains at D_A.Which of the following is true?

Rent controls primarily benefit

$-Refer to the above figure.A minimum wage has been set at \mathrm { W } _ { \mathrm { M } } .The amount of unemployment is$ -Refer to the above figure.A minimum wage has been set at $\mathrm { W } _ { \mathrm { M } }$ .The amount of unemployment is

Suppose that consumer income decreases and that hamburger is an inferior good.Which of the following will occur in the market for hamburger?

Minimum wages are examples of

Which of the following statements is most accurate regarding who benefits and loses from establishment of a minimum wage above the market clearing wage?

In a market system,which component conveys information about what is relatively scarce and what is relatively abundant?

A price ceiling is

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

Which of the following must occur as a result of ceilings on apartment rents that are set below market clearing rental rates?

The rationing function of prices means that

The adverse effects of rent controls include

In the housing market,rents serve the purpose of

The prices of certain goods,such as ice and gasoline,often increase after a natural disaster such as a hurricane.The economic explanation for this observation is that

The income of consumers increases.and the wage rate in the DVD industry increases.As a result,

Suppose that initially a market is in equilibrium at a price of $10 and a quantity of 5000 units per day.Several months later,the market is in a new equilibrium at a price of $5 and a quantity of 5000 units per day.What happened in the market?

Rent controls are an example of a

Which rationing system leads to the most efficient use of available resources?

Which of these would NOT be considered a middleman in a market?

With respect to the market clearing price and the equilibrium quantity of good X,increases in the demand for and the supply of good X will definitely

-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?

Rent controls primarily benefit

-Refer to the above figure.A minimum wage has been set at WM\mathrm { W } _ { \mathrm { M } }WM​ .The amount of unemployment is

Suppose that consumer income decreases and that hamburger is an inferior good.Which of the following will occur in the market for hamburger?

Minimum wages are examples of

Which of the following statements is most accurate regarding who benefits and loses from establishment of a minimum wage above the market clearing wage?

In a market system,which component conveys information about what is relatively scarce and what is relatively abundant?

A price ceiling is

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.Suppose that the supply curve shifts from S_A to S_B while the demand curve remains at D_A.Which of the following is true?

$-Refer to the above figure.A minimum wage has been set at \mathrm { W } _ { \mathrm { M } } .The amount of unemployment is$ -Refer to the above figure.A minimum wage has been set at $\mathrm { W } _ { \mathrm { M } }$ .The amount of unemployment is