Question 1

Rent controls are an example of a

Accepted Answer

A) price floor. 
B) price ceiling. 
C) price floor for the consumer and a price ceiling for the producer. 
D) nonprice rationing device. 
A) price floor. 
B) price ceiling. 
C) price floor for the consumer and a price ceiling for the producer. 
D) nonprice rationing device.

Question 2

All of the following result from price floors in agriculture EXCEPT

Accepted Answer

A) surpluses of agricultural products that have price floors. 
B) higher prices to consumers for agricultural products that have price floors. 
C) lower prices to consumers for agricultural products that have price floors. 
D) governmental bureaucracy. 
A) surpluses of agricultural products that have price floors. 
B) higher prices to consumers for agricultural products that have price floors. 
C) lower prices to consumers for agricultural products that have price floors. 
D) governmental bureaucracy.

Question 3

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 4

Price ceilings often generate

Accepted Answer

A) market clearing prices. 
B) rapid increases in supply to meet the excess demand. 
C) equilibriums that utilize rationing by price. 
D) black markets. 
A) market clearing prices. 
B) rapid increases in supply to meet the excess demand. 
C) equilibriums that utilize rationing by price. 
D) black markets.

Question 5

Which of the following must occur as a result of ceilings on apartment rents that are set below market clearing rental rates?

Accepted Answer

A) Property owners respond to the ceilings by increasing maintenance and repairs. 
B) Property owners respond to the ceilings by constructing new apartment buildings. 
C) There is a decrease in the quantity of apartments that prospective tenants wish to rent. 
D) There is a decrease in the quantity of apartments that property owners offer for rent. 
A) Property owners respond to the ceilings by increasing maintenance and repairs. 
B) Property owners respond to the ceilings by constructing new apartment buildings. 
C) There is a decrease in the quantity of apartments that prospective tenants wish to rent. 
D) There is a decrease in the quantity of apartments that property owners offer for rent.

Question 6

Price floors

Accepted Answer

A) provide free market incentives for producers. 
B) create surpluses by setting the price above equilibrium. 
C) create shortages by setting the price above equilibrium. 
D) are used by advocates of the free market. 
A) provide free market incentives for producers. 
B) create surpluses by setting the price above equilibrium. 
C) create shortages by setting the price above equilibrium. 
D) are used by advocates of the free market.

Question 7

Holding demand constant,an increase in supply leads to

Accepted Answer

A) lower prices and higher quantity demanded. 
B) lower prices and lower quantity demanded. 
C) higher prices and higher quantity demanded. 
D) higher prices and lower quantity demanded. 
A) lower prices and higher quantity demanded. 
B) lower prices and lower quantity demanded. 
C) higher prices and higher quantity demanded. 
D) higher prices and lower quantity demanded.

Question 8

Suppose the market clearing price is $1.25 and the price ceiling is $1.50.The price that prevails in the market will be

Accepted Answer

A) $1.50. 
B) $1.25. 
C) less than $1.25. 
D) more than $1.50. 
A) $1.50. 
B) $1.25. 
C) less than $1.25. 
D) more than $1.50.

Question 9

Government-imposed quantity restrictions

Accepted Answer

A) generate a higher price for the good than would prevail under freely competitive markets. 
B) generate a lower price for the good than would prevail under freely competitive markets. 
C) does not affect the price of the good because quantity restrictions always ban sale of the good completely. 
D) can cause prices to either be higher or lower,but always cause excess quantities supplied to develop. 
A) generate a higher price for the good than would prevail under freely competitive markets. 
B) generate a lower price for the good than would prevail under freely competitive markets. 
C) does not affect the price of the good because quantity restrictions always ban sale of the good completely. 
D) can cause prices to either be higher or lower,but always cause excess quantities supplied to develop.

Question 10

-Refer to the above figure.Suppose the government imposes a minimum wage rate of $20.00 per hour.This will likely result in

Accepted Answer

A) a surplus of labor. 
B) a shortage of labor. 
C) an equilibrium in the labor market. 
D) an increase in the demand for labor. 
A) a surplus of labor. 
B) a shortage of labor. 
C) an equilibrium in the labor market. 
D) an increase in the demand for labor.

Question 11

Government policies such as price controls,rent controls,and quantity restrictions have the effect of

Accepted Answer

A) promoting the attainment of an unhindered market equilibrium. 
B) allowing quantity demanded to adjust to equality with aggregate supply. 
C) creating excess quantities demanded or excess quantities supplied. 
D) pushing prices to market clearing levels more rapidly than private market forces. 
A) promoting the attainment of an unhindered market equilibrium. 
B) allowing quantity demanded to adjust to equality with aggregate supply. 
C) creating excess quantities demanded or excess quantities supplied. 
D) pushing prices to market clearing levels more rapidly than private market forces.

Question 12

Which of the following statements is most accurate regarding who benefits and loses from establishment of a minimum wage above the market clearing wage?

Accepted Answer

A) Individuals who obtain jobs benefit because they earn a higher wage,but some individuals lose because employers will not hire them at the minimum wage. 
B) All workers benefit equally from the establishment of the minimum wage because just as many workers as before remain employed,and all earn the higher minimum wage. 
C) All employers benefit equally from the establishment of the minimum wage because they are able to hire fewer workers at a lower wage. 
D) All employers lose because they must pay the higher minimum wage to the same number of employees as they did before the minimum wage was established. 
A) Individuals who obtain jobs benefit because they earn a higher wage,but some individuals lose because employers will not hire them at the minimum wage. 
B) All workers benefit equally from the establishment of the minimum wage because just as many workers as before remain employed,and all earn the higher minimum wage. 
C) All employers benefit equally from the establishment of the minimum wage because they are able to hire fewer workers at a lower wage. 
D) All employers lose because they must pay the higher minimum wage to the same number of employees as they did before the minimum wage was established.

Question 13

What are the terms of exchange and how are these terms related to the price?

Accepted Answer

The terms of exchange are the terms unde

Question 14

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

Accepted Answer

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

Question 15

If demand decreases and supply increases,

Accepted Answer

A) the market clearing price will decrease,and the equilibrium quantity will increase. 
B) the market clearing price will decrease,and equilibrium quantity will decrease. 
C) the equilibrium quantity will decrease,but the change in the market clearing price cannot be determined without more information. 
D) the equilibrium price will decrease,but the change in the equilibrium quantity cannot be determined without more information. 
A) the market clearing price will decrease,and the equilibrium quantity will increase. 
B) the market clearing price will decrease,and equilibrium quantity will decrease. 
C) the equilibrium quantity will decrease,but the change in the market clearing price cannot be determined without more information. 
D) the equilibrium price will decrease,but the change in the equilibrium quantity cannot be determined without more information.

Question 16

Rationing of resources,goods,and services

Accepted Answer

A) is not required under the price system. 
B) is required because of scarcity. 
C) must be done by the government. 
D) happens only when the price is zero. 
A) is not required under the price system. 
B) is required because of scarcity. 
C) must be done by the government. 
D) happens only when the price is zero.

Question 17

An unexpected import restriction imposed on mangoes by the USDA

Accepted Answer

A) will reduce the price of mangoes in the United States. 
B) will increase the price of mangoes in the United States. 
C) will discourage American producers of mangoes. 
D) will reduce the price of mango juice in the United States. 
A) will reduce the price of mangoes in the United States. 
B) will increase the price of mangoes in the United States. 
C) will discourage American producers of mangoes. 
D) will reduce the price of mango juice in the United States.

Question 18

An effective rent control will

Accepted Answer

A) lead to a surplus of housing units. 
B) keep rents below the competitive market level. 
C) keep rents above the competitive market level. 
D) be set at the price where quantity supplied equals quantity demanded. 
A) lead to a surplus of housing units. 
B) keep rents below the competitive market level. 
C) keep rents above the competitive market level. 
D) be set at the price where quantity supplied equals quantity demanded.

Question 19

When the supply and/or demand curve shift,the new market clearing price is

Accepted Answer

A) reached instantaneously. 
B) reached only after the government intervenes in the market. 
C) reached after some period of adjustment. 
D) never reached. 
A) reached instantaneously. 
B) reached only after the government intervenes in the market. 
C) reached after some period of adjustment. 
D) never reached.

Question 20

Explain how agricultural price supports work and what the effects of the supports are.

Accepted Answer

Under agricultural price supports,the go

Rent controls are an example of a

All of the following result from price floors in agriculture EXCEPT

Intermediaries,known as middlemen,specialize in

Price ceilings often generate

Which of the following must occur as a result of ceilings on apartment rents that are set below market clearing rental rates?

Price floors

Holding demand constant,an increase in supply leads to

Suppose the market clearing price is $1.25 and the price ceiling is $1.50.The price that prevails in the market will be

Government-imposed quantity restrictions

-Refer to the above figure.Suppose the government imposes a minimum wage rate of $20.00 per hour.This will likely result in

Government policies such as price controls,rent controls,and quantity restrictions have the effect of

Which of the following statements is most accurate regarding who benefits and loses from establishment of a minimum wage above the market clearing wage?

What are the terms of exchange and how are these terms related to the price?

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

If demand decreases and supply increases,

Rationing of resources,goods,and services

An unexpected import restriction imposed on mangoes by the USDA

An effective rent control will

When the supply and/or demand curve shift,the new market clearing price is

Explain how agricultural price supports work and what the effects of the supports are.

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

Rent controls are an example of a

All of the following result from price floors in agriculture EXCEPT

Intermediaries,known as middlemen,specialize in

Price ceilings often generate

Which of the following must occur as a result of ceilings on apartment rents that are set below market clearing rental rates?

Price floors

Holding demand constant,an increase in supply leads to

Suppose the market clearing price is $1.25 and the price ceiling is $1.50.The price that prevails in the market will be

Government-imposed quantity restrictions

-Refer to the above figure.Suppose the government imposes a minimum wage rate of $20.00 per hour.This will likely result in

Government policies such as price controls,rent controls,and quantity restrictions have the effect of

Which of the following statements is most accurate regarding who benefits and loses from establishment of a minimum wage above the market clearing wage?

What are the terms of exchange and how are these terms related to the price?

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

If demand decreases and supply increases,

Rationing of resources,goods,and services

An unexpected import restriction imposed on mangoes by the USDA

An effective rent control will

When the supply and/or demand curve shift,the new market clearing price is

Explain how agricultural price supports work and what the effects of the supports are.

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