Question 1

Price floors in agriculture lead to

Accepted Answer

A) efficient farming techniques being employed. 
B) surpluses of supported farm products. 
C) more competition in farming. 
D) the most efficient market solution. 
A) efficient farming techniques being employed. 
B) surpluses of supported farm products. 
C) more competition in farming. 
D) the most efficient market solution.

Question 2

In the labor market,adjustments to changes in supply and demand

Accepted Answer

A) usually occur instantly. 
B) usually take time to occur. 
C) do not apply,since the labor market does not respond to supply and demand forces. 
D) do not apply,since wages in the labor market always go up. 
A) usually occur instantly. 
B) usually take time to occur. 
C) do not apply,since the labor market does not respond to supply and demand forces. 
D) do not apply,since wages in the labor market always go up.

Question 3

If the demand for a product remains the same and the supply falls,

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 4

If the government imposes a price ceiling that is lower than the market clearing price,then

Accepted Answer

A) consumer surplus will increase while producer surplus will decrease. 
B) consumer surplus will decrease while producer surplus will increase. 
C) both consumer surplus and producer surplus will decrease. 
D) both consumer surplus and producer surplus will increase. 
A) consumer surplus will increase while producer surplus will decrease. 
B) consumer surplus will decrease while producer surplus will increase. 
C) both consumer surplus and producer surplus will decrease. 
D) both consumer surplus and producer surplus will increase.

Question 5

As demand for MP3 music downloads increases,other things being equal,we can expect

Accepted Answer

A) a decrease in both the relative price and quantity of MP3 music downloads. 
B) a decrease in the supply of MP3 music downloads. 
C) more MP3 music downloads to be produced. 
D) an excess number of MP3 music downloads in the market. 
A) a decrease in both the relative price and quantity of MP3 music downloads. 
B) a decrease in the supply of MP3 music downloads. 
C) more MP3 music downloads to be produced. 
D) an excess number of MP3 music downloads in the market.

Question 6

Who ultimately benefits from price supports in agriculture?

Accepted Answer

A) consumers 
B) grocery store owners 
C) farmers 
D) exporters 
A) consumers 
B) grocery store owners 
C) farmers 
D) exporters

Question 7

Markets tend to

Accepted Answer

A) exist primarily in towns or cities. 
B) increase transaction costs. 
C) reduce transaction costs. 
D) make exchange more difficult. 
A) exist primarily in towns or cities. 
B) increase transaction costs. 
C) reduce transaction costs. 
D) make exchange more difficult.

Question 8

When supply and demand for a product decrease simultaneously,we

Accepted Answer

A) can predict that both equilibrium price and quantity will increase. 
B) can predict that both equilibrium price and quantity will decrease. 
C) cannot predict equilibrium price,but know that equilibrium quantity will decrease. 
D) cannot predict the change in either the equilibrium quantity or equilibrium price. 
A) can predict that both equilibrium price and quantity will increase. 
B) can predict that both equilibrium price and quantity will decrease. 
C) cannot predict equilibrium price,but know that equilibrium quantity will decrease. 
D) cannot predict the change in either the equilibrium quantity or equilibrium price.

Question 9

In economic terms,the total price of a pound of meat for an individual who has waited in line is

Accepted Answer

A) the money price paid to the butcher for the pound of meat. 
B) the money price of meat relative to the price of bread or other necessity. 
C) the money price of the meat plus the opportunity cost of time spent waiting in line. 
D) the money price of an equal amount of meat substitute,such as beans and rice. 
A) the money price paid to the butcher for the pound of meat. 
B) the money price of meat relative to the price of bread or other necessity. 
C) the money price of the meat plus the opportunity cost of time spent waiting in line. 
D) the money price of an equal amount of meat substitute,such as beans and rice.

Question 10

When producers would have been willing to accept lower prices at various quantities produced than the market clearing price,the differences are called

Accepted Answer

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

Question 11

All of the following are examples of nonprice rationing devices EXCEPT

Accepted Answer

A) price controls. 
B) queues. 
C) black markets. 
D) waiting lists. 
A) price controls. 
B) queues. 
C) black markets. 
D) waiting lists.

Question 12

A price ceiling set below the market clearing price will tend to cause which of the following?

Accepted Answer

A) a surplus 
B) a shortage 
C) an increase in demand 
D) a reduction in supply 
A) a surplus 
B) a shortage 
C) an increase in demand 
D) a reduction in supply

Question 13

Suppose that the current equilibrium price of gasoline is $5.50 per gallon and that the government passes a law that requires the price to be no more than $5 per gallon.What will be the effects?

Accepted Answer

The fall in price from $5.50 to $5.00 ca

Question 14

Suppose that demand for tablets increases,and simultaneously,the supply of tablets increases.Which of the following would you conclude definitely will occur in the market for tablets?

Accepted Answer

A) The market clearing price will rise. 
B) The market clearing price will fall. 
C) The equilibrium quantity will rise. 
D) The equilibrium quantity will fall. 
A) The market clearing price will rise. 
B) The market clearing price will fall. 
C) The equilibrium quantity will rise. 
D) The equilibrium quantity will fall.

Question 15

Prices ration goods to

Accepted Answer

A) the people who most deserve it. 
B) the people with the lowest opportunity cost of time. 
C) the people willing and able to pay the highest price. 
D) the richest people. 
A) the people who most deserve it. 
B) the people with the lowest opportunity cost of time. 
C) the people willing and able to pay the highest price. 
D) the richest people.

Question 16

There has recently been an increase in the price of dairy products used in the production of ice cream.High temperatures have also induced people to consume more ice cream.In the market for ice cream,the effects these changes will have on equilibrium price and quantity are:

Accepted Answer

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

Question 17

Ways to ration goods include

Accepted Answer

A) first-come,first-served. 
B) political power. 
C) prices. 
D) all of the above. 
A) first-come,first-served. 
B) political power. 
C) prices. 
D) all of the above.

Question 18

The gains from trade within a price system is

Accepted Answer

A) the sum of consumer surplus and producer surplus. 
B) consumer surplus less producer surplus. 
C) consumer surplus divided by producer surplus. 
D) consumer surplus multiplied by producer surplus. 
A) the sum of consumer surplus and producer surplus. 
B) consumer surplus less producer surplus. 
C) consumer surplus divided by producer surplus. 
D) consumer surplus multiplied by producer surplus.

Question 19

Which of the following is NOT a device to reduce transaction costs?

Accepted Answer

A) Shopping centers 
B) Auto dealers located close together 
C) Government prohibitions on advertising 
D) Banks that direct funds from savers to borrowers 
A) Shopping centers 
B) Auto dealers located close together 
C) Government prohibitions on advertising 
D) Banks that direct funds from savers to borrowers

Question 20

If both supply and demand simultaneously decrease,

Accepted Answer

A) the market clearing price definitely rises,and the equilibrium quantity definitely falls. 
B) the market clearing price definitely rises,and the effect on the equilibrium quantity is indeterminate. 
C) the market clearing price definitely falls,and the effect on the equilibrium quantity is indeterminate. 
D) the effect on the market clearing price is indeterminate,and the equilibrium quantity definitely falls. 
A) the market clearing price definitely rises,and the equilibrium quantity definitely falls. 
B) the market clearing price definitely rises,and the effect on the equilibrium quantity is indeterminate. 
C) the market clearing price definitely falls,and the effect on the equilibrium quantity is indeterminate. 
D) the effect on the market clearing price is indeterminate,and the equilibrium quantity definitely falls.

Price floors in agriculture lead to

In the labor market,adjustments to changes in supply and demand

If the demand for a product remains the same and the supply falls,

If the government imposes a price ceiling that is lower than the market clearing price,then

As demand for MP3 music downloads increases,other things being equal,we can expect

Who ultimately benefits from price supports in agriculture?

Markets tend to

When supply and demand for a product decrease simultaneously,we

In economic terms,the total price of a pound of meat for an individual who has waited in line is

When producers would have been willing to accept lower prices at various quantities produced than the market clearing price,the differences are called

All of the following are examples of nonprice rationing devices EXCEPT

A price ceiling set below the market clearing price will tend to cause which of the following?

Suppose that the current equilibrium price of gasoline is $5.50 per gallon and that the government passes a law that requires the price to be no more than $5 per gallon.What will be the effects?

Suppose that demand for tablets increases,and simultaneously,the supply of tablets increases.Which of the following would you conclude definitely will occur in the market for tablets?

Prices ration goods to

There has recently been an increase in the price of dairy products used in the production of ice cream.High temperatures have also induced people to consume more ice cream.In the market for ice cream,the effects these changes will have on equilibrium price and quantity are:

Ways to ration goods include

The gains from trade within a price system is

Which of the following is NOT a device to reduce transaction costs?

If both supply and demand simultaneously decrease,

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

Price floors in agriculture lead to

In the labor market,adjustments to changes in supply and demand

If the demand for a product remains the same and the supply falls,

If the government imposes a price ceiling that is lower than the market clearing price,then

As demand for MP3 music downloads increases,other things being equal,we can expect

Who ultimately benefits from price supports in agriculture?

Markets tend to

When supply and demand for a product decrease simultaneously,we

In economic terms,the total price of a pound of meat for an individual who has waited in line is

When producers would have been willing to accept lower prices at various quantities produced than the market clearing price,the differences are called

All of the following are examples of nonprice rationing devices EXCEPT

A price ceiling set below the market clearing price will tend to cause which of the following?

Suppose that the current equilibrium price of gasoline is $5.50 per gallon and that the government passes a law that requires the price to be no more than $5 per gallon.What will be the effects?

Suppose that demand for tablets increases,and simultaneously,the supply of tablets increases.Which of the following would you conclude definitely will occur in the market for tablets?

Prices ration goods to

There has recently been an increase in the price of dairy products used in the production of ice cream.High temperatures have also induced people to consume more ice cream.In the market for ice cream,the effects these changes will have on equilibrium price and quantity are:

Ways to ration goods include

The gains from trade within a price system is

Which of the following is NOT a device to reduce transaction costs?

If both supply and demand simultaneously decrease,

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