Question 1

The type of non-price rationing that most closely approaches the market outcome is

Accepted Answer

A)  coupon rationing with coupons that can be resold. 
B)  coupon rationing with coupons that cannot be resold. 
C)  first-come, first-served basis or queuing. 
D)  favored customer rationing. 
A)  coupon rationing with coupons that can be resold. 
B)  coupon rationing with coupons that cannot be resold. 
C)  first-come, first-served basis or queuing. 
D)  favored customer rationing.

Question 2

Refer to the information provided in Figure 4.4 below to answer the questions that follow.   Figure 4.4
-Refer to Figure 4.4. If the United States levies no taxes on imported oil, which of the following would occur?

Accepted Answer

A)  The price of oil in the United States would fall to $100 per barrel, and the United States would import 10 million barrels of oil per day. 
B)  The price of oil in the United States would be $125 per barrel, and the United States would import 6 million barrels of oil per day. 
C)  The price of oil in the United States would be $150 per barrel, and the United States would import 2 million barrels of oil per day. 
D)  The price of oil in the United States after the U.S. government eliminated all taxes on imported oil cannot be determined from this information. 
A)  The price of oil in the United States would fall to $100 per barrel, and the United States would import 10 million barrels of oil per day. 
B)  The price of oil in the United States would be $125 per barrel, and the United States would import 6 million barrels of oil per day. 
C)  The price of oil in the United States would be $150 per barrel, and the United States would import 2 million barrels of oil per day. 
D)  The price of oil in the United States after the U.S. government eliminated all taxes on imported oil cannot be determined from this information.

Question 3

People scalping tickets for a jazz festival will be successful at selling the tickets for a profit

Accepted Answer

A)  any time the jazz festival is popular. 
B)  when the price set by the festival organizers is less than the market equilibrium price. 
C)  when prices are too high. 
D)  only when there is excess supply. 
A)  any time the jazz festival is popular. 
B)  when the price set by the festival organizers is less than the market equilibrium price. 
C)  when prices are too high. 
D)  only when there is excess supply.

Question 4

If the most someone is willing to pay for ticket to see their favorite team is $100 and the market price of the ticket is $35, then this buyer will get consumer surplus of

Accepted Answer

A)  1 ticket. 
B)  $35. 
C)  $65. 
D)  $100. 
A)  1 ticket. 
B)  $35. 
C)  $65. 
D)  $100.

Question 5

Refer to the information provided in Figure 4.5 below to answer the questions that follow.   Figure 4.5
-Refer to Figure 4.5. If a $10.00 per CD-Rom drive tax is levied on imported CD-Rom drives, the United States will

Accepted Answer

A)  import 3 million CD-Rom drives. 
B)  import 6 million CD-Rom drives. 
C)  import 9 million CD-Rom drives. 
D)  import 12 million CD-Rom drives. 
A)  import 3 million CD-Rom drives. 
B)  import 6 million CD-Rom drives. 
C)  import 9 million CD-Rom drives. 
D)  import 12 million CD-Rom drives.

Question 6

When there is overproduction in a market,

Accepted Answer

A)  market price is too low. 
B)  there is excess quantity demanded. 
C)  the total of consumer and producer surplus is maximized. 
D)  there is a deadweight loss. 
A)  market price is too low. 
B)  there is excess quantity demanded. 
C)  the total of consumer and producer surplus is maximized. 
D)  there is a deadweight loss.

Question 7

Refer to the information provided in Figure 4.4 below to answer the questions that follow.   Figure 4.4
-Refer to Figure 4.4. At the world price of $125 per barrel of oil, the United States imports ________ million barrels of oil per day.

Accepted Answer

A)  4 
B)  6 
C)  8 
D)  10 
A)  4 
B)  6 
C)  8 
D)  10

Question 8

In a "black market," goods are traded at market determined prices.

Accepted Answer

A) True 
 B)False

Question 9

Related to the Economics in Practice on page 88: When acquiring a ticket for a play takes a significant amount of time, the true economic cost of that ticket would include all of the following factors EXCEPT

Accepted Answer

A)  the amount of time spent acquiring the ticket. 
B)  the utility provided by seeing the play. 
C)  the earning power of the person acquiring the ticket. 
D)  the purchase price of the ticket. 
A)  the amount of time spent acquiring the ticket. 
B)  the utility provided by seeing the play. 
C)  the earning power of the person acquiring the ticket. 
D)  the purchase price of the ticket.

Question 10

When supply is fixed, price is supply determined.

Accepted Answer

A) True 
 B)False

Question 11

The market price of a basketball is $35 and the full cost of producing it is $20, then a basketball producing firm gets producer surplus of

Accepted Answer

A)  1 basketball. 
B)  $35. 
C)  $20. 
D)  $15. 
A)  1 basketball. 
B)  $35. 
C)  $20. 
D)  $15.

Question 12

Related to the Economics in Practice on page 88: Which of the following best explains why the people who wait for hours to acquire tickets to free performances earn less on average than the people who actually see those performances?

Accepted Answer

A)  The value of time spent waiting in line is less for people who earn less money. 
B)  People who earn more money are less likely to be aware of the opportunity to acquire free tickets. 
C)  High-wage individuals are more likely to have schedule conflicts that prevent them from using their tickets. 
D)  People interested in live performances are likely to have access to other forms of entertainment, such as television and radio. 
A)  The value of time spent waiting in line is less for people who earn less money. 
B)  People who earn more money are less likely to be aware of the opportunity to acquire free tickets. 
C)  High-wage individuals are more likely to have schedule conflicts that prevent them from using their tickets. 
D)  People interested in live performances are likely to have access to other forms of entertainment, such as television and radio.

Question 13

Refer to the information provided in Figure 4.6 below to answer the questions that follow.
Equilibrium in this market occurs at the intersection of curves S and D.   Figure 4.6
-In figure 4.6 at equilibrium, consumer surplus is area

Accepted Answer

A)  A. 
B)  A+B+C. 
C)  G. 
D)  E+F+G. 
A)  A. 
B)  A+B+C. 
C)  G. 
D)  E+F+G.

Question 14

Refer to the information provided in Figure 4.6 below to answer the questions that follow.
Equilibrium in this market occurs at the intersection of curves S and D.   Figure 4.6
-In figure 4.6 if price is P1, consumer surplus is area

Accepted Answer

A)  A. 
B)  A+B+E. 
C)  G. 
D)  B+C+E+F+G. 
A)  A. 
B)  A+B+E. 
C)  G. 
D)  B+C+E+F+G.

Question 15

If the price ceiling is set above the equilibrium price,

Accepted Answer

A)  quantity demanded will equal quantity supplied. 
B)  there will be a surplus. 
C)  there will be a shortage. 
D)  demand will be less than supply. 
A)  quantity demanded will equal quantity supplied. 
B)  there will be a surplus. 
C)  there will be a shortage. 
D)  demand will be less than supply.

Question 16

Refer to the information provided in Figure 4.1 below to answer the questions that follow.   Figure 4.1
-Refer to Figure 4.1. Assume that initially there is free trade. If the United States then imposes a 10-cent tax per apple,

Accepted Answer

A)  the quantity of apples demanded will be reduced by 4 million apples per day. 
B)  the quantity of apples supplied by U.S. firms will increase by 6 million apples per day. 
C)  the price of apples in the United States will increase to 40 cents per apple. 
D)  U.S. imports of apples will increase by 6 million per day. 
A)  the quantity of apples demanded will be reduced by 4 million apples per day. 
B)  the quantity of apples supplied by U.S. firms will increase by 6 million apples per day. 
C)  the price of apples in the United States will increase to 40 cents per apple. 
D)  U.S. imports of apples will increase by 6 million per day.

Question 17

A shortage is when there is an excess supply in a market.

Accepted Answer

A) True 
 B)False

Question 18

Consumer surplus describes a situation in which there is excess quantity supplied.

Accepted Answer

A) True 
 B)False

Question 19

If the equilibrium price of gasoline is $4.00 per gallon and the government will not allow oil companies to charge more than $3.00 per gallon of gasoline, which of the following will happen?

Accepted Answer

A)  Demand must eventually decrease so that the market will come into equilibrium at a price of $3.00. 
B)  Supply must eventually increase so that the market will come into equilibrium at a price of $3.00. 
C)  A nonprice rationing system such as ration coupons must be used to ration the available supply of gasoline. 
D)  The market will be in equilibrium at a price of $3.00. 
A)  Demand must eventually decrease so that the market will come into equilibrium at a price of $3.00. 
B)  Supply must eventually increase so that the market will come into equilibrium at a price of $3.00. 
C)  A nonprice rationing system such as ration coupons must be used to ration the available supply of gasoline. 
D)  The market will be in equilibrium at a price of $3.00.

Question 20

People scalping tickets for a rock concert can sell their tickets for at least a normal profit

Accepted Answer

A)  any time the rock group is popular. 
B)  when the price set by the concert hall is less than the market equilibrium price. 
C)  when prices are too high. 
D)  only when there is excess supply. 
A)  any time the rock group is popular. 
B)  when the price set by the concert hall is less than the market equilibrium price. 
C)  when prices are too high. 
D)  only when there is excess supply.

Exam 4: Demand and Supply Applications

The type of non-price rationing that most closely approaches the market outcome is

Refer to the information provided in Figure 4.4 below to answer the questions that follow. Figure 4.4 -Refer to Figure 4.4. If the United States levies no taxes on imported oil, which of the following would occur?

People scalping tickets for a jazz festival will be successful at selling the tickets for a profit

If the most someone is willing to pay for ticket to see their favorite team is $100 and the market price of the ticket is $35, then this buyer will get consumer surplus of

Refer to the information provided in Figure 4.5 below to answer the questions that follow. Figure 4.5 -Refer to Figure 4.5. If a $10.00 per CD-Rom drive tax is levied on imported CD-Rom drives, the United States will

When there is overproduction in a market,

Refer to the information provided in Figure 4.4 below to answer the questions that follow. Figure 4.4 -Refer to Figure 4.4. At the world price of $125 per barrel of oil, the United States imports ________ million barrels of oil per day.

In a "black market," goods are traded at market determined prices.

Related to the Economics in Practice on page 88: When acquiring a ticket for a play takes a significant amount of time, the true economic cost of that ticket would include all of the following factors EXCEPT

When supply is fixed, price is supply determined.

The market price of a basketball is $35 and the full cost of producing it is $20, then a basketball producing firm gets producer surplus of

Related to the Economics in Practice on page 88: Which of the following best explains why the people who wait for hours to acquire tickets to free performances earn less on average than the people who actually see those performances?

Refer to the information provided in Figure 4.6 below to answer the questions that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -In figure 4.6 at equilibrium, consumer surplus is area

Refer to the information provided in Figure 4.6 below to answer the questions that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -In figure 4.6 if price is P1, consumer surplus is area

If the price ceiling is set above the equilibrium price,

Refer to the information provided in Figure 4.1 below to answer the questions that follow. Figure 4.1 -Refer to Figure 4.1. Assume that initially there is free trade. If the United States then imposes a 10-cent tax per apple,

A shortage is when there is an excess supply in a market.

Consumer surplus describes a situation in which there is excess quantity supplied.

If the equilibrium price of gasoline is $4.00 per gallon and the government will not allow oil companies to charge more than $3.00 per gallon of gasoline, which of the following will happen?

People scalping tickets for a rock concert can sell their tickets for at least a normal profit

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Elasticity

Household Behavior and Consumer Choice

The Production Process: the Behavior of Profit-Maximizing Firms

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: the Labor and Land Markets

Input Demand: the Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Social Choice

Uncertainty and Asymmetric Information

Income Distribution and Poverty

Public Finance: The Economics of Taxation

International Trade, Comparative Advantage, and Protectionism

Economic Growth in Developing and Transitional Economies

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