Question 1

If price increases and the quantity purchased increases,we know that

Accepted Answer

A) supply increased. 
B) supply decreased. 
C) demand increased. 
D) demand decreased. 
A) supply increased. 
B) supply decreased. 
C) demand increased. 
D) demand decreased.

Question 2

In the United States,the wage floor legislated by government below which it is generally illegal to pay workers is known as

Accepted Answer

A) the minimum wage. 
B) the wage ceiling. 
C) the employment gap. 
D) the going wage. 
A) the minimum wage. 
B) the wage ceiling. 
C) the employment gap. 
D) the going wage.

Question 3

Describe the market process that should occur if the price of a product is below its equilibrium price; now describe what would occur if the price is above its equilibrium price,assuming no market interference.

Accepted Answer

If price is below its equilibrium price,

Question 4

Total producer surplus in a market is measured as the

Accepted Answer

A) area bounded above the market clearing price and beneath the market demand curve. 
B) area bounded below the market clearing price and above the market supply curve. 
C) vertical distance from the horizontal (quantity)axis to the market clearing price. 
D) horizontal distance from the vertical (price)axis to the equilibrium quantity. 
A) area bounded above the market clearing price and beneath the market demand curve. 
B) area bounded below the market clearing price and above the market supply curve. 
C) vertical distance from the horizontal (quantity)axis to the market clearing price. 
D) horizontal distance from the vertical (price)axis to the equilibrium quantity.

Question 5

The publication Consumer Reports reduces transaction costs on many purchases by

Accepted Answer

A) providing coupons. 
B) providing reliable information on product quality. 
C) advertising sales at discount stores. 
D) paying its employees low wages. 
A) providing coupons. 
B) providing reliable information on product quality. 
C) advertising sales at discount stores. 
D) paying its employees low wages.

Question 6

The market clearing price of computer modems has just decreased.Which of the following could have caused this change?

Accepted Answer

A) a decrease in supply at the same time that demand increases 
B) an increase in supply at the same time that demand decreases 
C) a decrease in supply with demand unchanged 
D) an increase in demand with supply unchanged 
A) a decrease in supply at the same time that demand increases 
B) an increase in supply at the same time that demand decreases 
C) a decrease in supply with demand unchanged 
D) an increase in demand with supply unchanged

Question 7

Of the following groups,which benefits most from a government price support program that establishes a floor price for an agricultural product that is higher than the product's market clearing price?

Accepted Answer

A) Consumers,who purchase more units of the product than they did before the price support program was implemented 
B) Taxpayers,who no longer must provide funds to purchase surplus units of the product once the price support program is in place 
C) Producers,who earn a higher price on the sale of each unit and also sell more units,thereby unambiguously earning higher revenues 
D) The government,which receives subsidy payments from producers that are required to sell more of the product at a higher price under the government's program 
A) Consumers,who purchase more units of the product than they did before the price support program was implemented 
B) Taxpayers,who no longer must provide funds to purchase surplus units of the product once the price support program is in place 
C) Producers,who earn a higher price on the sale of each unit and also sell more units,thereby unambiguously earning higher revenues 
D) The government,which receives subsidy payments from producers that are required to sell more of the product at a higher price under the government's program

Question 8

Because of scarcity,rationing is

Accepted Answer

A) unimportant because people get what they want. 
B) necessary because people cannot get everything they want. 
C) unimportant because prices clear markets. 
D) not a problem because governments can determine what everybody wants. 
A) unimportant because people get what they want. 
B) necessary because people cannot get everything they want. 
C) unimportant because prices clear markets. 
D) not a problem because governments can determine what everybody wants.

Question 9

Which of the following would likely result as a consequence of rent controls?

Accepted Answer

A) a reduction in the rate of construction of rental housing units 
B) unimproved buildings and apartment complexes 
C) limits on tenant mobility 
D) All of the above are correct. 
A) a reduction in the rate of construction of rental housing units 
B) unimproved buildings and apartment complexes 
C) limits on tenant mobility 
D) All of the above are correct.

Question 10

An effective price ceiling occurs when

Accepted Answer

A) the government sets a maximum price for a good above the equilibrium price. 
B) the government sets a minimum price for a good above the equilibrium price. 
C) the government sets a minimum price for a good below the equilibrium price. 
D) the government sets a maximum price for a good below the equilibrium price. 
A) the government sets a maximum price for a good above the equilibrium price. 
B) the government sets a minimum price for a good above the equilibrium price. 
C) the government sets a minimum price for a good below the equilibrium price. 
D) the government sets a maximum price for a good below the equilibrium price.

Question 11

Government intervention in agriculture usually involves

Accepted Answer

A) price ceilings in order to keep food prices low. 
B) price ceilings in order to subsidize U.S.exports. 
C) price supports in order to keep farm incomes high. 
D) price supports in order to keep agricultural imports low. 
A) price ceilings in order to keep food prices low. 
B) price ceilings in order to subsidize U.S.exports. 
C) price supports in order to keep farm incomes high. 
D) price supports in order to keep agricultural imports low.

Question 12

Ways to ration goods include

Accepted Answer

A) first-come,first-served. 
B) political power. 
C) prices. 
D) all of the above. 
A) first-come,first-served. 
B) political power. 
C) prices. 
D) all of the above.

Question 13

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

Accepted Answer

A) the quantity traded will be 150,and the price will be $40. 
B) the quantity traded will be 100,and the price will be $60. 
C) the quantity traded will be 200,and the price will be $60. 
D) the quantity traded will be 150,and the price will be $60. 
A) the quantity traded will be 150,and the price will be $40. 
B) the quantity traded will be 100,and the price will be $60. 
C) the quantity traded will be 200,and the price will be $60. 
D) the quantity traded will be 150,and the price will be $60.

Question 14

An increase in the equilibrium quantity of good X can be caused by

Accepted Answer

A) an increase the price of inputs utilized in producing good X. 
B) an increase in the price of good X. 
C) a technological improvement in the process of producing good X. 
D) a reduction in the number of producers of good X. 
A) an increase the price of inputs utilized in producing good X. 
B) an increase in the price of good X. 
C) a technological improvement in the process of producing good X. 
D) a reduction in the number of producers of good X.

Question 15

What would happen in the market for rental housing in your community if the local government legally mandated rents that were below the market clearing price?

Accepted Answer

A) There would be a surplus of rental housing. 
B) There would be a shortage of rental housing. 
C) The demand for rental housing would increase. 
D) The supply of rental housing would decrease. 
A) There would be a surplus of rental housing. 
B) There would be a shortage of rental housing. 
C) The demand for rental housing would increase. 
D) The supply of rental housing would decrease.

Question 16

Which one of the following could account for an increase in the market clearing price of iPads?

Accepted Answer

A) a decrease in demand for iPads 
B) an increase in supply of iPads 
C) an increase in supply along with a decrease in demand 
D) an increase in demand along with a decrease in supply 
A) a decrease in demand for iPads 
B) an increase in supply of iPads 
C) an increase in supply along with a decrease in demand 
D) an increase in demand along with a decrease in supply

Question 17

If supply and demand both simultaneously increase,

Accepted Answer

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

Question 18

If both the demand for and the supply of computers are increasing,which of the following statements is true?

Accepted Answer

A) The consumer should buy a computer now since the price will be higher in the future. 
B) The consumer should wait and buy a computer later since the price will be lower in the future. 
C) The price of a computer will be the same in the future as it is now. 
D) It is impossible to know,given only this information,whether the prices of computers will go up or down in the future. 
A) The consumer should buy a computer now since the price will be higher in the future. 
B) The consumer should wait and buy a computer later since the price will be lower in the future. 
C) The price of a computer will be the same in the future as it is now. 
D) It is impossible to know,given only this information,whether the prices of computers will go up or down in the future.

Question 19

For a given market demand curve,if the market clearing price decreases,then the amount of consumer surplus will

Accepted Answer

A) decrease. 
B) increase. 
C) become negative. 
D) none of the above due to insufficient information 
A) decrease. 
B) increase. 
C) become negative. 
D) none of the above due to insufficient information

Question 20

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.If the government imposes a price ceiling on garbanzo beans of $8,what would be the likely result?

Accepted Answer

A) a surplus of 2,000 garbanzo beans on the market 
B) a shortage of 2,000 garbanzo beans on the market 
C) Market equilibrium will be reached. 
D) The quantity demanded of garbanzo beans would fall to zero. 
A) a surplus of 2,000 garbanzo beans on the market 
B) a shortage of 2,000 garbanzo beans on the market 
C) Market equilibrium will be reached. 
D) The quantity demanded of garbanzo beans would fall to zero.

Exam 3: Extensions of Demand and Supply Analysis

If price increases and the quantity purchased increases,we know that

In the United States,the wage floor legislated by government below which it is generally illegal to pay workers is known as

Describe the market process that should occur if the price of a product is below its equilibrium price; now describe what would occur if the price is above its equilibrium price,assuming no market interference.

Total producer surplus in a market is measured as the

The publication Consumer Reports reduces transaction costs on many purchases by

The market clearing price of computer modems has just decreased.Which of the following could have caused this change?

Of the following groups,which benefits most from a government price support program that establishes a floor price for an agricultural product that is higher than the product's market clearing price?

Because of scarcity,rationing is

Which of the following would likely result as a consequence of rent controls?

An effective price ceiling occurs when

Government intervention in agriculture usually involves

Ways to ration goods include

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

An increase in the equilibrium quantity of good X can be caused by

What would happen in the market for rental housing in your community if the local government legally mandated rents that were below the market clearing price?

Which one of the following could account for an increase in the market clearing price of iPads?

If supply and demand both simultaneously increase,

If both the demand for and the supply of computers are increasing,which of the following statements is true?

For a given market demand curve,if the market clearing price decreases,then the amount of consumer surplus will

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.If the government imposes a price ceiling on garbanzo beans of $8,what would be the likely result?

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

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