Question 1

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

Accepted Answer

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

Question 2

An import quota is an example of

Accepted Answer

A) a price ceiling. 
B) a price floor. 
C) a queuing device. 
D) a quantity restriction. 
A) a price ceiling. 
B) a price floor. 
C) a queuing device. 
D) a quantity restriction.

Question 3

When a government increases an effective price ceiling for a product

Accepted Answer

A) the shortage in the market will be reduced. 
B) the shortage in the market will be increased. 
C) the surplus in the market will be reduced. 
D) the surplus in the market will increase. 
A) the shortage in the market will be reduced. 
B) the shortage in the market will be increased. 
C) the surplus in the market will be reduced. 
D) the surplus in the market will increase.

Question 4

An increase in supply causes

Accepted Answer

A) quantity supplied to decrease. 
B) supply and price to increase. 
C) price to decrease. 
D) price to increase. 
A) quantity supplied to decrease. 
B) supply and price to increase. 
C) price to decrease. 
D) price to increase.

Question 5

Other things being equal,suppose that the demand for wheat in constant quality units increases.The increase in demand will cause

Accepted Answer

A) a surplus of wheat. 
B) a higher equilibrium price and higher equilibrium quantity of wheat. 
C) fall in the market clearing price of corn,a substitute for wheat. 
D) a higher equilibrium quantity,but a lower equilibrium price of wheat. 
A) a surplus of wheat. 
B) a higher equilibrium price and higher equilibrium quantity of wheat. 
C) fall in the market clearing price of corn,a substitute for wheat. 
D) a higher equilibrium quantity,but a lower equilibrium price of wheat.

Question 6

Suppose you observe that the price of movie admissions decline and that the number of people attending movies declines as well.If only the demand curve or the supply curve shifts,this suggests that

Accepted Answer

A) movies are a normal good and incomes have increased. 
B) high salaries for Hollywood actors have increased the cost of movie making. 
C) movie theaters have experienced an increase in their operating costs due to increases in the minimum wage. 
D) admission prices for other types of entertainment,such as live shows and sporting events,have also declined. 
A) movies are a normal good and incomes have increased. 
B) high salaries for Hollywood actors have increased the cost of movie making. 
C) movie theaters have experienced an increase in their operating costs due to increases in the minimum wage. 
D) admission prices for other types of entertainment,such as live shows and sporting events,have also declined.

Question 7

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 8

Instituting a rent control program will most likely lead to

Accepted Answer

A) a shortage of rental units. 
B) overly elaborate and expensive construction. 
C) an efficient allocation of existing units among consumers. 
D) an excess quantity supplied of rental units. 
A) a shortage of rental units. 
B) overly elaborate and expensive construction. 
C) an efficient allocation of existing units among consumers. 
D) an excess quantity supplied of rental units.

Question 9

If other factors remain unchanged,technological progress in producing good X definitely will lead to

Accepted Answer

A) an increase in the market clearing price of good X and a decrease in the equilibrium quantity of good X. 
B) an increase in both the market clearing price and the equilibrium quantity of good X. 
C) a decrease in the market clearing price of good X and an increase in the equilibrium quantity of good X. 
D) a decrease in both the market clearing price and the equilibrium quantity of good X. 
A) an increase in the market clearing price of good X and a decrease in the equilibrium quantity of good X. 
B) an increase in both the market clearing price and the equilibrium quantity of good X. 
C) a decrease in the market clearing price of good X and an increase in the equilibrium quantity of good X. 
D) a decrease in both the market clearing price and the equilibrium quantity of good X.

Question 10

Suppose the price of cheese rises.In the market for pizza,one would expect that

Accepted Answer

A) the supply of pizza would increase,and the price would fall. 
B) the demand for pizza would increase,and the price would increase. 
C) the demand for pizza would decrease,and price would fall. 
D) the supply of pizza would decrease,and price would rise. 
A) the supply of pizza would increase,and the price would fall. 
B) the demand for pizza would increase,and the price would increase. 
C) the demand for pizza would decrease,and price would fall. 
D) the supply of pizza would decrease,and price would rise.

Question 11

Who bears the costs of a program to control rents at a maximum level?

Accepted Answer

A) Landlords or owners of housing units 
B) Consumers who face difficulty moving to a more suitable apartment 
C) Homeless who cannot find rental units 
D) All of these 
A) Landlords or owners of housing units 
B) Consumers who face difficulty moving to a more suitable apartment 
C) Homeless who cannot find rental units 
D) All of these

Question 12

-Refer to the above figure.If a price ceiling of $3 was set,

Accepted Answer

A) the quantity sold would be 80 units. 
B) there would be a surplus of 40 units. 
C) there would be a shortage of 40 units. 
D) there would be a shortage of 20 units. 
A) the quantity sold would be 80 units. 
B) there would be a surplus of 40 units. 
C) there would be a shortage of 40 units. 
D) there would be a shortage of 20 units.

Question 13

Suppose the price of lumber decreases.In the market for new homes,we would expect which of the following to occur?

Accepted Answer

A) the market clearing price will fall and the equilibrium quantity will rise. 
B) the market clearing price will rise and the equilibrium quantity will fall. 
C) both the market clearing price and the equilibrium quantity will fall. 
D) both the market clearing price and the equilibrium quantity will rise. 
A) the market clearing price will fall and the equilibrium quantity will rise. 
B) the market clearing price will rise and the equilibrium quantity will fall. 
C) both the market clearing price and the equilibrium quantity will fall. 
D) both the market clearing price and the equilibrium quantity will rise.

Question 14

According to the text,during World War II rationing was conducted in the U.S.through the use of

Accepted Answer

A) queuing. 
B) lotteries. 
C) coupons. 
D) sharing. 
A) queuing. 
B) lotteries. 
C) coupons. 
D) sharing.

Question 15

The U.S.government imposes import quotas on many agricultural products,especially products that receive price supports.Offer an economic explanation for this.

Accepted Answer

If the price supports generate a price i

Question 16

Suppose you are told that the equilibrium price of gasoline has increased,while the equilibrium quantity of gasoline has fallen.You are also told that either the demand changed or supply changed,but not both.Which of the following must have occurred?

Accepted Answer

A) Demand increased. 
B) Demand decreased. 
C) Supply increased. 
D) Supply decreased. 
A) Demand increased. 
B) Demand decreased. 
C) Supply increased. 
D) Supply decreased.

Question 17

Suppose a hurricane causes a great deal of destruction in Florida.After the hurricane,it takes much longer than usual for the reconstruction to take place.A possible explanation for this is

Accepted Answer

A) greed by suppliers of construction materials increased. 
B) government prevented price gouging during the reconstruction period. 
C) prices of construction materials fell in the Midwest. 
D) environmental restrictions on lumbering in the Pacific Northwest were relaxed. 
A) greed by suppliers of construction materials increased. 
B) government prevented price gouging during the reconstruction period. 
C) prices of construction materials fell in the Midwest. 
D) environmental restrictions on lumbering in the Pacific Northwest were relaxed.

Question 18

Finding an apartment in New York City is difficult.People even scan the obituaries in the hopes of finding an apartment.Provide an economic explanation for this.

Accepted Answer

Rental rates in New York City are contro

Question 19

In which of the following situations will both market clearing price and the equilibrium quantity increase?

Accepted Answer

A) an increase in demand with no change in supply 
B) an increase in supply with no change in demand 
C) a decrease in supply with no change in demand 
D) a decrease in demand with no change in supply 
A) an increase in demand with no change in supply 
B) an increase in supply with no change in demand 
C) a decrease in supply with no change in demand 
D) a decrease in demand with no change in supply

Question 20

-Refer to the above figure.A price ceiling has been set at   ,and a black market has opened.The equilibrium black market price will be

Accepted Answer

A) below   
B) between   and   
C) above   
D)    
A) below   
B) between   and   
C) above   
D)

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

An import quota is an example of

When a government increases an effective price ceiling for a product

An increase in supply causes

Other things being equal,suppose that the demand for wheat in constant quality units increases.The increase in demand will cause

Suppose you observe that the price of movie admissions decline and that the number of people attending movies declines as well.If only the demand curve or the supply curve shifts,this suggests that

Government intervention in agriculture usually involves

Instituting a rent control program will most likely lead to

If other factors remain unchanged,technological progress in producing good X definitely will lead to

Suppose the price of cheese rises.In the market for pizza,one would expect that

Who bears the costs of a program to control rents at a maximum level?

-Refer to the above figure.If a price ceiling of $3 was set,

Suppose the price of lumber decreases.In the market for new homes,we would expect which of the following to occur?

According to the text,during World War II rationing was conducted in the U.S.through the use of

The U.S.government imposes import quotas on many agricultural products,especially products that receive price supports.Offer an economic explanation for this.

Suppose you are told that the equilibrium price of gasoline has increased,while the equilibrium quantity of gasoline has fallen.You are also told that either the demand changed or supply changed,but not both.Which of the following must have occurred?

Suppose a hurricane causes a great deal of destruction in Florida.After the hurricane,it takes much longer than usual for the reconstruction to take place.A possible explanation for this is

Finding an apartment in New York City is difficult.People even scan the obituaries in the hopes of finding an apartment.Provide an economic explanation for this.

In which of the following situations will both market clearing price and the equilibrium quantity increase?

-Refer to the above figure.A price ceiling has been set at ,and a black market has opened.The equilibrium black market price 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

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

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Exam 4: Extensions of Demand and Supply Analysis

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

An import quota is an example of

When a government increases an effective price ceiling for a product

An increase in supply causes

Other things being equal,suppose that the demand for wheat in constant quality units increases.The increase in demand will cause

Suppose you observe that the price of movie admissions decline and that the number of people attending movies declines as well.If only the demand curve or the supply curve shifts,this suggests that

Government intervention in agriculture usually involves

Instituting a rent control program will most likely lead to

If other factors remain unchanged,technological progress in producing good X definitely will lead to

Suppose the price of cheese rises.In the market for pizza,one would expect that

Who bears the costs of a program to control rents at a maximum level?

-Refer to the above figure.If a price ceiling of $3 was set,

Suppose the price of lumber decreases.In the market for new homes,we would expect which of the following to occur?

According to the text,during World War II rationing was conducted in the U.S.through the use of

The U.S.government imposes import quotas on many agricultural products,especially products that receive price supports.Offer an economic explanation for this.

Suppose you are told that the equilibrium price of gasoline has increased,while the equilibrium quantity of gasoline has fallen.You are also told that either the demand changed or supply changed,but not both.Which of the following must have occurred?

Suppose a hurricane causes a great deal of destruction in Florida.After the hurricane,it takes much longer than usual for the reconstruction to take place.A possible explanation for this is

Finding an apartment in New York City is difficult.People even scan the obituaries in the hopes of finding an apartment.Provide an economic explanation for this.

In which of the following situations will both market clearing price and the equilibrium quantity increase?

-Refer to the above figure.A price ceiling has been set at ,and a black market has opened.The equilibrium black market price 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

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