Question 1

The adverse effects of rent controls include

Accepted Answer

A) keeping rental rates too high in a normal market. 
B) excessive construction of new rental housing. 
C) reduced incentive to construct new rental housing. 
D) increased incentives for people to purchase their own homes. 
A) keeping rental rates too high in a normal market. 
B) excessive construction of new rental housing. 
C) reduced incentive to construct new rental housing. 
D) increased incentives for people to purchase their own homes.

Question 2

If the government imposed a price ceiling on gasoline above this good's current market clearing price,there would be

Accepted Answer

A) a shortage of gasoline.at the ceiling price. 
B) a surplus of gasoline at the ceiling price. 
C) an increase in the price of gasoline. 
D) no change in the price of gasoline. 
A) a shortage of gasoline.at the ceiling price. 
B) a surplus of gasoline at the ceiling price. 
C) an increase in the price of gasoline. 
D) no change in the price of gasoline.

Question 3

-Refer to the above figure.If government sets the maximum legal price of gasoline at $2 per gallon,then the $2 limit acts as

Accepted Answer

A) a price floor. 
B) a price ceiling. 
C) an equilibrium price. 
D) a just price. 
A) a price floor. 
B) a price ceiling. 
C) an equilibrium price. 
D) a just price.

Question 4

In the United States,the minimum wage is defined as

Accepted Answer

A) the wage that the youngest job entrant into the job market makes. 
B) the lowest wage that a corporation should pay a worker if the corporation wants to ensure that its employees are well trained. 
C) the lowest hourly wage rate a firm may legally pay its workers,as legislated by the U.S.government. 
D) the wage ceiling above which a firm no longer must pay its employees additional benefits. 
A) the wage that the youngest job entrant into the job market makes. 
B) the lowest wage that a corporation should pay a worker if the corporation wants to ensure that its employees are well trained. 
C) the lowest hourly wage rate a firm may legally pay its workers,as legislated by the U.S.government. 
D) the wage ceiling above which a firm no longer must pay its employees additional benefits.

Question 5

In which decade did the U.S.federal government first establish a system of agricultural price supports?

Accepted Answer

A) 1990s 
B) 1970s 
C) 1950s 
D) 1930s 
A) 1990s 
B) 1970s 
C) 1950s 
D) 1930s

Question 6

An increase in the price of labor used to produce good Y will lead to

Accepted Answer

A) an increase in the market clearing price of good Y. 
B) an increase in the supply of good Y. 
C) a decrease in the demand for good Y. 
D) an increase in the demand for good Y. 
A) an increase in the market clearing price of good Y. 
B) an increase in the supply of good Y. 
C) a decrease in the demand for good Y. 
D) an increase in the demand for good Y.

Question 7

Of the following groups,who gains from rent controls?

Accepted Answer

A) Landlords 
B) Construction workers and their union leaders 
C) Poor people who have a hard time earning enough income to pay high rents 
D) High-income people who live in rent-controlled apartments 
A) Landlords 
B) Construction workers and their union leaders 
C) Poor people who have a hard time earning enough income to pay high rents 
D) High-income people who live in rent-controlled apartments

Question 8

In some developing countries and in some former Communist countries ,people exchange their domestic currencies for foreign currencies such as the dollar in black markets.Why would this practice go on?

Accepted Answer

The country must have some restrictions

Question 9

A price ceiling below the market clearing price results in I.excess quantity demand
II.excess quantity supplied
III.entry of new producers

Accepted Answer

A) I only 
B) II only 
C) III only 
D) Both I and III 
A) I only 
B) II only 
C) III only 
D) Both I and III

Question 10

Which of the following would likely result as a consequence of rent controls?

Accepted Answer

A) a reduction in the rate of construction of rental housing units 
B) unimproved buildings and apartment complexes 
C) limits on tenant mobility 
D) All of the above are correct. 
A) a reduction in the rate of construction of rental housing units 
B) unimproved buildings and apartment complexes 
C) limits on tenant mobility 
D) All of the above are correct.

Question 11

Which of the following is a price floor?

Accepted Answer

A) rent controls 
B) minimum wage rates 
C) a freeze on upward-moving gasoline prices 
D) college tuition caps 
A) rent controls 
B) minimum wage rates 
C) a freeze on upward-moving gasoline prices 
D) college tuition caps

Question 12

Which of the following is most likely to benefit from government established price floors in agriculture?

Accepted Answer

A) large farm owners and corporate farms 
B) small farmers 
C) cattle ranchers 
D) low income farmers 
A) large farm owners and corporate farms 
B) small farmers 
C) cattle ranchers 
D) low income farmers

Question 13

Rationing goods on the basis of price is a direct result of

Accepted Answer

A) scarcity. 
B) queuing. 
C) government intervention. 
D) the profit motive. 
A) scarcity. 
B) queuing. 
C) government intervention. 
D) the profit motive.

Question 14

-Refer to the above figure.If the government set a price floor of $3.50 per gallon,there would be

Accepted Answer

A) an excess quantity demanded equal to 100,000 gallons. 
B) an excess quantity supplied equal to the distance BD. 
C) an excess quantity supplied equal to the distance BF. 
D) an excess quantity supplied equal to 100,000 gallons. 
A) an excess quantity demanded equal to 100,000 gallons. 
B) an excess quantity supplied equal to the distance BD. 
C) an excess quantity supplied equal to the distance BF. 
D) an excess quantity supplied equal to 100,000 gallons.

Question 15

If price increases and the quantity purchased increases,we know that

Accepted Answer

A) supply increased. 
B) supply decreased. 
C) demand increased. 
D) demand decreased. 
A) supply increased. 
B) supply decreased. 
C) demand increased. 
D) demand decreased.

Question 16

Suppose the price of crude oil used to produce gasoline rises significantly.At the same time,consumers purchase hybrid cars in great numbers.In the market for gasoline,the market clearing price ________ and the equilibrium quantity ________.

Accepted Answer

A) definitely falls,is indeterminate 
B) is indeterminate,definitely falls 
C) definitely falls,definitely rises 
D) definitely rises,is indeterminate 
A) definitely falls,is indeterminate 
B) is indeterminate,definitely falls 
C) definitely falls,definitely rises 
D) definitely rises,is indeterminate

Question 17

Which of the following is NOT an example of a transaction cost?

Accepted Answer

A) The enjoyment of owning the good. 
B) The opportunity cost of time spent looking for stores that sold the good desired. 
C) The cost of returning a defective product. 
D) Time spent bargaining over the price of a good. 
A) The enjoyment of owning the good. 
B) The opportunity cost of time spent looking for stores that sold the good desired. 
C) The cost of returning a defective product. 
D) Time spent bargaining over the price of a good.

Question 18

Following adjustments to a new equilibrium in a market,the equilibrium quantity remains unchanged,but the market clearing price is now lower.Which of the following could definitely have caused this outcome?

Accepted Answer

A) Demand and supply both increased. 
B) Demand and supply both decreased. 
C) Demand increased,and supply decreased. 
D) Demand decreased,and supply increased. 
A) Demand and supply both increased. 
B) Demand and supply both decreased. 
C) Demand increased,and supply decreased. 
D) Demand decreased,and supply increased.

Question 19

A technological advancement has just occurred in the computer chip industry.In the computer chip market this will lead to

Accepted Answer

A) an increase in price and a decrease in quantity. 
B) an increase in price and an increase in quantity. 
C) a decrease in price and a decrease in quantity. 
D) a decrease in price and an increase in quantity. 
A) an increase in price and a decrease in quantity. 
B) an increase in price and an increase in quantity. 
C) a decrease in price and a decrease in quantity. 
D) a decrease in price and an increase in quantity.

Question 20

The difference between quantity restrictions and price ceilings as to their effect on the market is that

Accepted Answer

A) only price ceilings make the market inefficient. 
B) only quantity restrictions make the market inefficient. 
C) while some consumers gain from price ceilings,no consumers gain from quantity restrictions. 
D) while price ceilings are efficient,quantity restrictions are not. 
A) only price ceilings make the market inefficient. 
B) only quantity restrictions make the market inefficient. 
C) while some consumers gain from price ceilings,no consumers gain from quantity restrictions. 
D) while price ceilings are efficient,quantity restrictions are not.

The adverse effects of rent controls include

If the government imposed a price ceiling on gasoline above this good's current market clearing price,there would be

-Refer to the above figure.If government sets the maximum legal price of gasoline at $2 per gallon,then the $2 limit acts as

In the United States,the minimum wage is defined as

In which decade did the U.S.federal government first establish a system of agricultural price supports?

An increase in the price of labor used to produce good Y will lead to

Of the following groups,who gains from rent controls?

In some developing countries and in some former Communist countries ,people exchange their domestic currencies for foreign currencies such as the dollar in black markets.Why would this practice go on?

A price ceiling below the market clearing price results in I.excess quantity demand II.excess quantity supplied III.entry of new producers

Which of the following would likely result as a consequence of rent controls?

Which of the following is a price floor?

Which of the following is most likely to benefit from government established price floors in agriculture?

Rationing goods on the basis of price is a direct result of

-Refer to the above figure.If the government set a price floor of $3.50 per gallon,there would be

If price increases and the quantity purchased increases,we know that

Suppose the price of crude oil used to produce gasoline rises significantly.At the same time,consumers purchase hybrid cars in great numbers.In the market for gasoline,the market clearing price and the equilibrium quantity .

Which of the following is NOT an example of a transaction cost?

Following adjustments to a new equilibrium in a market,the equilibrium quantity remains unchanged,but the market clearing price is now lower.Which of the following could definitely have caused this outcome?

A technological advancement has just occurred in the computer chip industry.In the computer chip market this will lead to

The difference between quantity restrictions and price ceilings as to their effect on the market is that

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 adverse effects of rent controls include

If the government imposed a price ceiling on gasoline above this good's current market clearing price,there would be

-Refer to the above figure.If government sets the maximum legal price of gasoline at $2 per gallon,then the $2 limit acts as

In the United States,the minimum wage is defined as

In which decade did the U.S.federal government first establish a system of agricultural price supports?

An increase in the price of labor used to produce good Y will lead to

Of the following groups,who gains from rent controls?

In some developing countries and in some former Communist countries ,people exchange their domestic currencies for foreign currencies such as the dollar in black markets.Why would this practice go on?

A price ceiling below the market clearing price results in I.excess quantity demand II.excess quantity supplied III.entry of new producers

Which of the following would likely result as a consequence of rent controls?

Which of the following is a price floor?

Which of the following is most likely to benefit from government established price floors in agriculture?

Rationing goods on the basis of price is a direct result of

-Refer to the above figure.If the government set a price floor of $3.50 per gallon,there would be

If price increases and the quantity purchased increases,we know that

Suppose the price of crude oil used to produce gasoline rises significantly.At the same time,consumers purchase hybrid cars in great numbers.In the market for gasoline,the market clearing price ________ and the equilibrium quantity ________.

Which of the following is NOT an example of a transaction cost?

Following adjustments to a new equilibrium in a market,the equilibrium quantity remains unchanged,but the market clearing price is now lower.Which of the following could definitely have caused this outcome?

A technological advancement has just occurred in the computer chip industry.In the computer chip market this will lead to

The difference between quantity restrictions and price ceilings as to their effect on the market is that

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

Suppose the price of crude oil used to produce gasoline rises significantly.At the same time,consumers purchase hybrid cars in great numbers.In the market for gasoline,the market clearing price and the equilibrium quantity .