Question 1

The price system features

Accepted Answer

A) exchanges made in currency only. 
B) voluntary exchange that makes both the consumer and producer better off. 
C) exchanges made only on a barter basis. 
D) an exchange in which consumer is made better off and the producer is made worse off. 
A) exchanges made in currency only. 
B) voluntary exchange that makes both the consumer and producer better off. 
C) exchanges made only on a barter basis. 
D) an exchange in which consumer is made better off and the producer is made worse off.

Question 2

A price floor set above a market equilibrium price causes

Accepted Answer

A) a surplus. 
B) a shortage. 
C) producers to receive lower prices. 
D) consumers to pay lower prices. 
A) a surplus. 
B) a shortage. 
C) producers to receive lower prices. 
D) consumers to pay lower prices.

Question 3

Which of the following is a main characteristic of exchanges in the market system?

Accepted Answer

A) Decisions to trade are based on individuals' self interest. 
B) Exchanges are highly regulated by the government. 
C) Sellers hire economists to determine the market clearing price. 
D) Exchanges are part of the legislative imperative. 
A) Decisions to trade are based on individuals' self interest. 
B) Exchanges are highly regulated by the government. 
C) Sellers hire economists to determine the market clearing price. 
D) Exchanges are part of the legislative imperative.

Question 4

In which decade did the U.S.federal government first establish a system of agricultural price supports?

Accepted Answer

A) 1990s 
B) 1970s 
C) 1950s 
D) 1930s 
A) 1990s 
B) 1970s 
C) 1950s 
D) 1930s

Question 5

In a situation in which rationing is by queues,the total price of the rationed good is

Accepted Answer

A) equal to the funds paid for the good. 
B) less than the funds paid for the good. 
C) equal to the funds paid for the good plus the opportunity cost of the time spent waiting. 
D) equal to the funds paid for the good less the opportunity cost of the time spent waiting. 
A) equal to the funds paid for the good. 
B) less than the funds paid for the good. 
C) equal to the funds paid for the good plus the opportunity cost of the time spent waiting. 
D) equal to the funds paid for the good less the opportunity cost of the time spent waiting.

Question 6

An import quota

Accepted Answer

A) is a price ceiling imposed on an imported good. 
B) is a price floor imposed on an imported good. 
C) is a supply restriction limiting the quantity of a good that can be imported. 
D) is a legislative requirement stating that firms which import some of their merchandise must hire a certain number of immigrant workers. 
A) is a price ceiling imposed on an imported good. 
B) is a price floor imposed on an imported good. 
C) is a supply restriction limiting the quantity of a good that can be imported. 
D) is a legislative requirement stating that firms which import some of their merchandise must hire a certain number of immigrant workers.

Question 7

All other factors being constant,a reduction in price tends to cause which of the following?

Accepted Answer

A) an increase in supply and an increase in demand. 
B) a reduction in supply and an increase in demand. 
C) an increase in quantity supplied and a reduction in quantity demanded. 
D) a reduction in quantity supplied and an increase in quantity demanded. 
A) an increase in supply and an increase in demand. 
B) a reduction in supply and an increase in demand. 
C) an increase in quantity supplied and a reduction in quantity demanded. 
D) a reduction in quantity supplied and an increase in quantity demanded.

Question 8

In situations in which prices cannot be used to signal relative scarcities of goods,which of the following can serve as a rationing mechanism?

Accepted Answer

A) queuing 
B) political power 
C) random assignment 
D) all of the above 
A) queuing 
B) political power 
C) random assignment 
D) all of the above

Question 9

Rent controls often have adverse effects,including

Accepted Answer

A) too much housing in a community. 
B) deterioration in the quality of existing rental units. 
C) too much construction of new rental units in the community. 
D) income transfers from the poor to landlords. 
A) too much housing in a community. 
B) deterioration in the quality of existing rental units. 
C) too much construction of new rental units in the community. 
D) income transfers from the poor to landlords.

Question 10

Price floors in agriculture lead to

Accepted Answer

A) efficient farming techniques being employed. 
B) surpluses of supported farm products. 
C) more competition in farming. 
D) the most efficient market solution. 
A) efficient farming techniques being employed. 
B) surpluses of supported farm products. 
C) more competition in farming. 
D) the most efficient market solution.

Question 11

When supply and demand for a product increase simultaneously,we

Accepted Answer

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

Question 12

-Refer to the above figure.A price support set at $\mathrm { P } _ { 3 }$ will

Accepted Answer

A) lead to a surplus of $\mathrm { Q } _ { 3 }$ minus
$\mathrm { Q } _ { 1 }$ . 
B) lead to a shortage of $\mathrm { Q } _ { 3 }$ minus
$\mathrm { Q } _ { 1 }$ . 
C) lead to an equilibrium quantity of $\mathrm { Q } _ { 2 }$ . 
D) be ineffective. 
A) lead to a surplus of $\mathrm { Q } _ { 3 }$ minus
$\mathrm { Q } _ { 1 }$ . 
B) lead to a shortage of $\mathrm { Q } _ { 3 }$ minus
$\mathrm { Q } _ { 1 }$ . 
C) lead to an equilibrium quantity of $\mathrm { Q } _ { 2 }$ . 
D) be ineffective.

Question 13

For which situation would we expect the adjustment speed to be the fastest?

Accepted Answer

A) The demand for surgeons increases. 
B) A large increase in birth rates leads to an increase in elementary school teachers. 
C) The demand for movie videos increases. 
D) The demand for office space in downtown Chicago increases. 
A) The demand for surgeons increases. 
B) A large increase in birth rates leads to an increase in elementary school teachers. 
C) The demand for movie videos increases. 
D) The demand for office space in downtown Chicago increases.

Question 14

Intermediaries,known as middlemen,specialize in

Accepted Answer

A) reducing transaction costs. 
B) negotiating high prices for sellers. 
C) negotiating low prices for buyers. 
D) encouraging consumers to buy goods on credit,rather than with cash. 
A) reducing transaction costs. 
B) negotiating high prices for sellers. 
C) negotiating low prices for buyers. 
D) encouraging consumers to buy goods on credit,rather than with cash.

Question 15

If a price ceiling is set above the current market clearing price,then

Accepted Answer

A) a surplus must immediately occur. 
B) a shortage must immediately occur. 
C) there will be incentives for black markets to develop. 
D) quantity demanded will remain equal to quantity supplied at the current market clearing price. 
A) a surplus must immediately occur. 
B) a shortage must immediately occur. 
C) there will be incentives for black markets to develop. 
D) quantity demanded will remain equal to quantity supplied at the current market clearing price.

Question 16

Producer surplus is

Accepted Answer

A) the total difference between the total amount that producers actually receive for an item and the total amount that they would have been willing to accept. 
B) the total difference between the total costs firms incur in producing an item and the utility consumers derive from purchasing the item. 
C) the total difference between the total amount that consumers are willing to pay for an item and the total amount that producers would like to receive. 
D) the total difference between the utility consumers derive from purchasing an item and the total costs firms incur in producing the item. 
A) the total difference between the total amount that producers actually receive for an item and the total amount that they would have been willing to accept. 
B) the total difference between the total costs firms incur in producing an item and the utility consumers derive from purchasing the item. 
C) the total difference between the total amount that consumers are willing to pay for an item and the total amount that producers would like to receive. 
D) the total difference between the utility consumers derive from purchasing an item and the total costs firms incur in producing the item.

Question 17

If both buyers and sellers expect the price of a commodity to fall in the future,it is likely that the market clearing price ________ and the equilibrium quantity ________.

Accepted Answer

A) will fall,cannot be predicted 
B) will rise,cannot be predicted 
C) cannot be predicted,will fall 
D) cannot be predicted,will rise 
A) will fall,cannot be predicted 
B) will rise,cannot be predicted 
C) cannot be predicted,will fall 
D) cannot be predicted,will rise

Question 18

A black market is a market in which

Accepted Answer

A) goods are traded at prices above their legal maximum prices. 
B) sales taxes are effectively doubled. 
C) goods are sold at outlet prices. 
D) sales take place exclusively at outlet prices. 
A) goods are traded at prices above their legal maximum prices. 
B) sales taxes are effectively doubled. 
C) goods are sold at outlet prices. 
D) sales take place exclusively at outlet prices.

Question 19

When a market clearing price is determined,

Accepted Answer

A) the exchange between buyers and sellers is voluntary. 
B) the exchange between buyers and sellers is directed by outside factors such as the government. 
C) the exchange between buyers and sellers benefits only the buyers. 
D) the exchange between buyers and sellers benefits only the sellers. 
A) the exchange between buyers and sellers is voluntary. 
B) the exchange between buyers and sellers is directed by outside factors such as the government. 
C) the exchange between buyers and sellers benefits only the buyers. 
D) the exchange between buyers and sellers benefits only the sellers.

Question 20

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

Accepted Answer

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

Exam 3: Extensions of Demand and Supply Analysis

The price system features

A price floor set above a market equilibrium price causes

Which of the following is a main characteristic of exchanges in the market system?

In which decade did the U.S.federal government first establish a system of agricultural price supports?

In a situation in which rationing is by queues,the total price of the rationed good is

An import quota

All other factors being constant,a reduction in price tends to cause which of the following?

In situations in which prices cannot be used to signal relative scarcities of goods,which of the following can serve as a rationing mechanism?

Rent controls often have adverse effects,including

Price floors in agriculture lead to

When supply and demand for a product increase simultaneously,we

-Refer to the above figure.A price support set at P3\mathrm { P } _ { 3 }P3​ will

For which situation would we expect the adjustment speed to be the fastest?

Intermediaries,known as middlemen,specialize in

If a price ceiling is set above the current market clearing price,then

Producer surplus is

If both buyers and sellers expect the price of a commodity to fall in the future,it is likely that the market clearing price ________ and the equilibrium quantity ________.

A black market is a market in which

When a market clearing price is determined,

-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 quantity will be

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

$-Refer to the above figure.A price support set at \mathrm { P } _ { 3 } will$ -Refer to the above figure.A price support set at $\mathrm { P } _ { 3 }$ will

If both buyers and sellers expect the price of a commodity to fall in the future,it is likely that the market clearing price and the equilibrium quantity .

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