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. B

Question 2

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 A

Question 3

Suppose new research shows that soy milk and other products derived from soybeans provide more health benefits than previously thought.At the same time,drought conditions result in extensive damage to the soybean crop.What will be the combined impact of these two factors on the equilibrium price and quantity of soybeans?

Accepted Answer

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

Question 4

-Refer to the above figure.At a price of $2 per gallon,the quantity demanded of gasoline is

Accepted Answer

A) 80,000 gallons per month. 
B) 100,000 gallons per month. 
C) 60,000 gallons per month. 
D) 140,000 gallons per month. 
A) 80,000 gallons per month. 
B) 100,000 gallons per month. 
C) 60,000 gallons per month. 
D) 140,000 gallons per month.

Question 5

If one day it was discovered that lime juice caused cancer,which of the following would likely result?

Accepted Answer

A) The supply curve for lime juice would shift to the right. 
B) The supply curve for lime juice would shift to the left. 
C) The demand curve for lime juice would shift to the right. 
D) The demand curve for lime juice would shift to the left. 
A) The supply curve for lime juice would shift to the right. 
B) The supply curve for lime juice would shift to the left. 
C) The demand curve for lime juice would shift to the right. 
D) The demand curve for lime juice would shift to the left.

Question 6

Rationing through the price system

Accepted Answer

A) leads to an inefficient use of available resources. 
B) leads to high prices. 
C) works only with government interference. 
D) leads to an efficient use of available resources. 
A) leads to an inefficient use of available resources. 
B) leads to high prices. 
C) works only with government interference. 
D) leads to an efficient use of available resources.

Question 7

-Refer to the above figure.If the government imposes a price floor of $20,

Accepted Answer

A) the quantity traded will be 150,and the price will be $20. 
B) the quantity traded will be 100,and the price will be $20. 
C) the quantity traded will be 200,and the price will be $20. 
D) none of the above. 
A) the quantity traded will be 150,and the price will be $20. 
B) the quantity traded will be 100,and the price will be $20. 
C) the quantity traded will be 200,and the price will be $20. 
D) none of the above.

Question 8

An increase in demand and an increase in supply will lead to

Accepted Answer

A) unambiguous increases in both price and quantity. 
B) unambiguous decreases in both price and quantity. 
C) an unambiguous increase in quantity,but the effect on price is indeterminate. 
D) an unambiguous increase in price,but the effect on quantity is indeterminate. 
A) unambiguous increases in both price and quantity. 
B) unambiguous decreases in both price and quantity. 
C) an unambiguous increase in quantity,but the effect on price is indeterminate. 
D) an unambiguous increase in price,but the effect on quantity is indeterminate.

Question 9

Scalping at major sporting events is an example of

Accepted Answer

A) a surplus caused by the existence of price ceilings. 
B) the operation of rationing by the market. 
C) a black market caused by a price ceiling. 
D) a black market caused by a price floor. 
A) a surplus caused by the existence of price ceilings. 
B) the operation of rationing by the market. 
C) a black market caused by a price ceiling. 
D) a black market caused by a price floor.

Question 10

When the government sets a maximum price that can be charged for a good or service,it creates

Accepted Answer

A) a price support. 
B) a price floor. 
C) a white market. 
D) a price ceiling. 
A) a price support. 
B) a price floor. 
C) a white market. 
D) a price ceiling.

Question 11

-Refer to the above figure.A price ceiling of $20 results in

Accepted Answer

A) a shortage of 100 units. 
B) a shortage of 200 units. 
C) a surplus of 100 units. 
D) a surplus of 200 units. 
A) a shortage of 100 units. 
B) a shortage of 200 units. 
C) a surplus of 100 units. 
D) a surplus of 200 units.

Question 12

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 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

In a world of scarcity,there has to be some way to ration the available resources.According to economists,the most efficient use of available resources occurs when rationing occurs via

Accepted Answer

A) queuing. 
B) lotteries. 
C) political power. 
D) the price system. 
A) queuing. 
B) lotteries. 
C) political power. 
D) the price system.

Question 15

A change in an equilibrium price can result from I.A change in demand
II.A change in supply

Accepted Answer

A) I only 
B) II only 
C) Both I and II 
D) Neither I nor II 
A) I only 
B) II only 
C) Both I and II 
D) Neither I nor II

Question 16

Which of the following is an effect of a minimum wage law that establishes a ceiling wage below the current market clearing wage?

Accepted Answer

A) Surplus labor,or unemployment 
B) A decrease in the market clearing wage 
C) A decrease in the quantity of labor supplied 
D) An increase in the quantity of labor supplied 
A) Surplus labor,or unemployment 
B) A decrease in the market clearing wage 
C) A decrease in the quantity of labor supplied 
D) An increase in the quantity of labor supplied

Question 17

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 18

Suppose there is a simultaneous increase in the demand for wheat and increase in the supply of wheat.Which of the following will occur as a result of these simultaneous events?

Accepted Answer

A) Both the market clearing price and equilibrium quantity will rise. 
B) The market clearing price will fall,but the equilibrium quantity will rise. 
C) The market clearing price may rise,fall,or stay the same,but the equilibrium quantity will rise. 
D) The market clearing price will fall,but the equilibrium quantity may rise,fall,or stay the same. 
A) Both the market clearing price and equilibrium quantity will rise. 
B) The market clearing price will fall,but the equilibrium quantity will rise. 
C) The market clearing price may rise,fall,or stay the same,but the equilibrium quantity will rise. 
D) The market clearing price will fall,but the equilibrium quantity may rise,fall,or stay the same.

Question 19

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 20

-Refer to the above figure.A minimum wage has been set at   .The amount of unemployment is

Accepted Answer

A) zero. 
B) at   . 
C)    minus   . 
D) not computable from the information given. 
A) zero. 
B) at   . 
C)    minus   . 
D) not computable from the information given.

The price system features

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

-Refer to the above figure.At a price of $2 per gallon,the quantity demanded of gasoline is

If one day it was discovered that lime juice caused cancer,which of the following would likely result?

Rationing through the price system

-Refer to the above figure.If the government imposes a price floor of $20,

An increase in demand and an increase in supply will lead to

Scalping at major sporting events is an example of

When the government sets a maximum price that can be charged for a good or service,it creates

-Refer to the above figure.A price ceiling of $20 results in

Because of scarcity,rationing is

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

In a world of scarcity,there has to be some way to ration the available resources.According to economists,the most efficient use of available resources occurs when rationing occurs via

A change in an equilibrium price can result from I.A change in demand II.A change in supply

Which of the following is an effect of a minimum wage law that establishes a ceiling wage below the current market clearing wage?

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

Suppose there is a simultaneous increase in the demand for wheat and increase in the supply of wheat.Which of the following will occur as a result of these simultaneous events?

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

-Refer to the above figure.A minimum wage has been set at .The amount of unemployment is

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

Exam 4: Extensions of Demand and Supply Analysis

The price system features

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

-Refer to the above figure.At a price of $2 per gallon,the quantity demanded of gasoline is

If one day it was discovered that lime juice caused cancer,which of the following would likely result?

Rationing through the price system

-Refer to the above figure.If the government imposes a price floor of $20,

An increase in demand and an increase in supply will lead to

Scalping at major sporting events is an example of

When the government sets a maximum price that can be charged for a good or service,it creates

-Refer to the above figure.A price ceiling of $20 results in

Because of scarcity,rationing is

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

In a world of scarcity,there has to be some way to ration the available resources.According to economists,the most efficient use of available resources occurs when rationing occurs via

A change in an equilibrium price can result from I.A change in demand II.A change in supply

Which of the following is an effect of a minimum wage law that establishes a ceiling wage below the current market clearing wage?

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

Suppose there is a simultaneous increase in the demand for wheat and increase in the supply of wheat.Which of the following will occur as a result of these simultaneous events?

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

-Refer to the above figure.A minimum wage has been set at .The amount of unemployment is

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters