Question 1

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

Accepted Answer

A) a surplus of 20,000 gallons per month. 
B) a shortage of 40,000 gallons per month. 
C) a shortage of 80,000 gallons per month. 
D) a shortage of 60,000 gallons per month. 
A) a surplus of 20,000 gallons per month. 
B) a shortage of 40,000 gallons per month. 
C) a shortage of 80,000 gallons per month. 
D) a shortage of 60,000 gallons per month.

Question 2

-Refer to the above table.Suppose there are technological advances in the production of smartphones.The new equilibrium price will be

Accepted Answer

A) $275. 
B) $375. 
C) less than $275. 
D) between $275 and $375. 
A) $275. 
B) $375. 
C) less than $275. 
D) between $275 and $375.

Question 3

Market clearing prices in a market system act as

Accepted Answer

A) a signaling device. 
B) a direct measure of resource costs. 
C) a way for producers to advertise. 
D) a legally determined rationing device. 
A) a signaling device. 
B) a direct measure of resource costs. 
C) a way for producers to advertise. 
D) a legally determined rationing device.

Question 4

Suppose there is a simultaneous increase in demand and increase in supply.Given this information,we know with certainty that

Accepted Answer

A) both the equilibrium price and the equilibrium quantity will increase. 
B) the equilibrium price will increase,and the equilibrium quantity will increase. 
C) the equilibrium quantity will increase. 
D) the equilibrium price will increase. 
A) both the equilibrium price and the equilibrium quantity will increase. 
B) the equilibrium price will increase,and the equilibrium quantity will increase. 
C) the equilibrium quantity will increase. 
D) the equilibrium price will increase.

Question 5

When consumers would have been willing to pay higher prices at various quantities consumed than the market clearing price,the differences are called

Accepted Answer

A) consumer surplus. 
B) monopoly profits. 
C) opportunity cost. 
D) deadweight loss. 
A) consumer surplus. 
B) monopoly profits. 
C) opportunity cost. 
D) deadweight loss.

Question 6

The more flexible prices are,the

Accepted Answer

A) greater demand shifts have to be to bring about a new equilibrium. 
B) larger the shifts in supply will be after a change in demand. 
C) greater the reliance by sellers to change the nominal price. 
D) more quickly a shock to the economy can be absorbed. 
A) greater demand shifts have to be to bring about a new equilibrium. 
B) larger the shifts in supply will be after a change in demand. 
C) greater the reliance by sellers to change the nominal price. 
D) more quickly a shock to the economy can be absorbed.

Question 7

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 8

Which of the following statements is FALSE?

Accepted Answer

A) The rationing function of prices is not allowed to freely operate when the government imposes price controls. 
B) Price controls may take the form of price ceilings or price floors. 
C) Price ceilings below the equilibrium price can cause black markets to develop. 
D) Rent controls are examples of price floors. 
A) The rationing function of prices is not allowed to freely operate when the government imposes price controls. 
B) Price controls may take the form of price ceilings or price floors. 
C) Price ceilings below the equilibrium price can cause black markets to develop. 
D) Rent controls are examples of price floors.

Question 9

As a result of establishing a legal minimum wage above the market clearing wage,

Accepted Answer

A) there will be a shortage of workers. 
B) firms will hire fewer workers. 
C) firms will hire more workers. 
D) fewer workers will want to work. 
A) there will be a shortage of workers. 
B) firms will hire fewer workers. 
C) firms will hire more workers. 
D) fewer workers will want to work.

Question 10

-Refer to the above figure.A shortage occurs if the government imposes

Accepted Answer

A) a price floor at $60. 
B) a price floor at $20. 
C) a price ceiling at $60. 
D) a price ceiling at $20. 
A) a price floor at $60. 
B) a price floor at $20. 
C) a price ceiling at $60. 
D) a price ceiling at $20.

Question 11

We cannot predict the effect on the market clearing price,but know that the equilibrium quantity will decrease when

Accepted Answer

A) supply increases and demand decreases 
B) supply decreases and demand increases. 
C) supply and demand for a product simultaneously decrease. 
D) supply and demand for a product simultaneously increase. 
A) supply increases and demand decreases 
B) supply decreases and demand increases. 
C) supply and demand for a product simultaneously decrease. 
D) supply and demand for a product simultaneously increase.

Question 12

If demand increases while supply simultaneously decreases,then the equilibrium quantity

Accepted Answer

A) always increases. 
B) always decreases. 
C) can never change. 
D) none of the above 
A) always increases. 
B) always decreases. 
C) can never change. 
D) none of the above

Question 13

Using a graph,show a market equilibrium.Suppose the costs of inputs increase.How is this shown on the graph? Explain what is happening in the market.

Accepted Answer

@#IMG-DLM& In the graph,the original equilibrium i

Question 14

Another term for intermediaries who specialize in reducing transaction costs is

Accepted Answer

A) service providers. 
B) consultants. 
C) middlemen. 
D) revenue agents. 
A) service providers. 
B) consultants. 
C) middlemen. 
D) revenue agents.

Question 15

If Niki is willing to pay up to $5 for an ice-cream bar but she actually pays $2 for it.The consumer surplus of the ice-cream bar for Niki

Accepted Answer

A) is $2. 
B) is $3. 
C) is $7. 
D) cannot be determined without information about the market structure. 
A) is $2. 
B) is $3. 
C) is $7. 
D) cannot be determined without information about the market structure.

Question 16

Which of the following statement is false?

Accepted Answer

A) Only the price system can be used to ration goods. 
B) Random assignment can be a method of rationing. 
C) Coupons can be used to ration goods. 
D) Queuing can be used for rationing. 
A) Only the price system can be used to ration goods. 
B) Random assignment can be a method of rationing. 
C) Coupons can be used to ration goods. 
D) Queuing can be used for rationing.

Question 17

All of the following are methods of rationing goods EXCEPT

Accepted Answer

A) political power. 
B) the profit motive. 
C) first come,first served. 
D) prices. 
A) political power. 
B) the profit motive. 
C) first come,first served. 
D) prices.

Question 18

The price system

Accepted Answer

A) is the voluntary exchange system used in the United States. 
B) is old fashioned and is no longer used. 
C) is used only in countries that are developing. 
D) is used to set resource prices only. 
A) is the voluntary exchange system used in the United States. 
B) is old fashioned and is no longer used. 
C) is used only in countries that are developing. 
D) is used to set resource prices only.

Question 19

We cannot predict the effect on the equilibrium quantity,but know that the market clearing price will increase when

Accepted Answer

A) supply decreases and at the same time demand increases. 
B) supply increases and demand increases simultaneously. 
C) supply and demand decreases simultaneously. 
D) supply and demand increases simultaneously. 
A) supply decreases and at the same time demand increases. 
B) supply increases and demand increases simultaneously. 
C) supply and demand decreases simultaneously. 
D) supply and demand increases simultaneously.

Question 20

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.

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

-Refer to the above table.Suppose there are technological advances in the production of smartphones.The new equilibrium price will be

Market clearing prices in a market system act as

Suppose there is a simultaneous increase in demand and increase in supply.Given this information,we know with certainty that

When consumers would have been willing to pay higher prices at various quantities consumed than the market clearing price,the differences are called

The more flexible prices are,the

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

Which of the following statements is FALSE?

As a result of establishing a legal minimum wage above the market clearing wage,

-Refer to the above figure.A shortage occurs if the government imposes

We cannot predict the effect on the market clearing price,but know that the equilibrium quantity will decrease when

If demand increases while supply simultaneously decreases,then the equilibrium quantity

Using a graph,show a market equilibrium.Suppose the costs of inputs increase.How is this shown on the graph? Explain what is happening in the market.

Another term for intermediaries who specialize in reducing transaction costs is

If Niki is willing to pay up to $5 for an ice-cream bar but she actually pays $2 for it.The consumer surplus of the ice-cream bar for Niki

Which of the following statement is false?

All of the following are methods of rationing goods EXCEPT

The price system

We cannot predict the effect on the equilibrium quantity,but know that the market clearing price will increase when

Total producer surplus in a market is measured as the

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

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

-Refer to the above table.Suppose there are technological advances in the production of smartphones.The new equilibrium price will be

Market clearing prices in a market system act as

Suppose there is a simultaneous increase in demand and increase in supply.Given this information,we know with certainty that

When consumers would have been willing to pay higher prices at various quantities consumed than the market clearing price,the differences are called

The more flexible prices are,the

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

Which of the following statements is FALSE?

As a result of establishing a legal minimum wage above the market clearing wage,

-Refer to the above figure.A shortage occurs if the government imposes

We cannot predict the effect on the market clearing price,but know that the equilibrium quantity will decrease when

If demand increases while supply simultaneously decreases,then the equilibrium quantity

Using a graph,show a market equilibrium.Suppose the costs of inputs increase.How is this shown on the graph? Explain what is happening in the market.

Another term for intermediaries who specialize in reducing transaction costs is

If Niki is willing to pay up to $5 for an ice-cream bar but she actually pays $2 for it.The consumer surplus of the ice-cream bar for Niki

Which of the following statement is false?

All of the following are methods of rationing goods EXCEPT

The price system

We cannot predict the effect on the equilibrium quantity,but know that the market clearing price will increase when

Total producer surplus in a market is measured as the

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