Question 1

A price ceiling set above the equilibrium price will cause which of the following?

Accepted Answer

A) an increase in supply 
B) a surplus 
C) a shortage 
D) no effect on either the price or quantity 
A) an increase in supply 
B) a surplus 
C) a shortage 
D) no effect on either the price or quantity

Question 2

An import quota will

Accepted Answer

A) lead to a shift of the demand curve. 
B) leave the equilibrium price unchanged and increase the quantity sold. 
C) limit the amount of a foreign good that can be brought into the United States. 
D) limit the amount of a good local producers can make. 
A) lead to a shift of the demand curve. 
B) leave the equilibrium price unchanged and increase the quantity sold. 
C) limit the amount of a foreign good that can be brought into the United States. 
D) limit the amount of a good local producers can make.

Question 3

In the 1970s,the government placed price ceilings on gasoline prices.A shortage of gasoline occurred,and long lines formed at the pumps.Some gas stations required that in addition to paying the price on the pump you had to buy a blank will.The action of having to purchase the will in order to purchase gas is known as

Accepted Answer

A) a surplus. 
B) a price support. 
C) the price system. 
D) a black market. 
A) a surplus. 
B) a price support. 
C) the price system. 
D) a black market.

Question 4

Which of the following is NOT a function of rental prices?

Accepted Answer

A) To stimulate the construction of new housing 
B) To ration the existing housing stock 
C) To provide housing to individuals below market value 
D) To allocate existing scarce housing among different people 
A) To stimulate the construction of new housing 
B) To ration the existing housing stock 
C) To provide housing to individuals below market value 
D) To allocate existing scarce housing among different people

Question 5

-Refer to the above figure.A surplus 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 6

In which of the following situations will market clearing price decrease 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 7

What has been the market outcome of government-enforced price floors for agricultural products?

Accepted Answer

A) Not enough food has been produced. 
B) Farmers have been made worse off. 
C) A shortage of agricultural products has resulted. 
D) A surplus of agricultural products has resulted. 
A) Not enough food has been produced. 
B) Farmers have been made worse off. 
C) A shortage of agricultural products has resulted. 
D) A surplus of agricultural products has resulted.

Question 8

-Refer to the above figure.If a price floor of $5 was set,

Accepted Answer

A) the quantity sold would be 80 units. 
B) the quantity sold would be 60 units. 
C) the quantity demanded would be 100 units. 
D) there would be a shortage of 20 units. 
A) the quantity sold would be 80 units. 
B) the quantity sold would be 60 units. 
C) the quantity demanded would be 100 units. 
D) there would be a shortage of 20 units.

Question 9

In a city that has rent control for apartments,there is

Accepted Answer

A) less turnover of apartments. 
B) a surplus of apartments available to rent. 
C) a shortage of renters in the city. 
D) neither a surplus nor a shortage of apartments. 
A) less turnover of apartments. 
B) a surplus of apartments available to rent. 
C) a shortage of renters in the city. 
D) neither a surplus nor a shortage of apartments.

Question 10

The market for gasoline in May is in equilibrium,at a market clearing price of $4.50 per gallon.After Memorial Day,the demand curve for gasoline increases,which causes

Accepted Answer

A) the demand curve for gasoline to shift to the right,creating a shortage at $4.50 per gallon which causes the market clearing price of gasoline to rise. 
B) the demand curve for gasoline to shift to the right,creating a shortage at $4.50 per gallon which causes the market clearing price of gasoline to fall. 
C) the demand curve for gasoline to shift to the left,creating a shortage at $4.50 per gallon which causes the market clearing price of gasoline to rise. 
D) the demand curve for gasoline to shift to the left,creating a shortage at $4.50 per gallon which causes the market clearing price of gasoline to fall. 
A) the demand curve for gasoline to shift to the right,creating a shortage at $4.50 per gallon which causes the market clearing price of gasoline to rise. 
B) the demand curve for gasoline to shift to the right,creating a shortage at $4.50 per gallon which causes the market clearing price of gasoline to fall. 
C) the demand curve for gasoline to shift to the left,creating a shortage at $4.50 per gallon which causes the market clearing price of gasoline to rise. 
D) the demand curve for gasoline to shift to the left,creating a shortage at $4.50 per gallon which causes the market clearing price of gasoline to fall.

Question 11

A price ceiling established below the market clearing price will usually cause

Accepted Answer

A) nonprice rationing. 
B) an excess supply. 
C) no change in the market clearing price. 
D) a decrease in the market clearing price. 
A) nonprice rationing. 
B) an excess supply. 
C) no change in the market clearing price. 
D) a decrease in the market clearing price.

Question 12

One result of the agriculture price supports cited in the text is that

Accepted Answer

A) sometimes surplus food is given away. 
B) food shortages result in most cases. 
C) small farms receive most of the benefits. 
D) none of the above. 
A) sometimes surplus food is given away. 
B) food shortages result in most cases. 
C) small farms receive most of the benefits. 
D) none of the above.

Question 13

If the demand for a product rises and the supply stays the same

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

In order to be effective,a price floor

Accepted Answer

A) must be set below equilibrium price. 
B) must be set above equilibrium price. 
C) must be set at equilibrium price. 
D) must be a zero price. 
A) must be set below equilibrium price. 
B) must be set above equilibrium price. 
C) must be set at equilibrium price. 
D) must be a zero price.

Question 15

The total gains from trade within a price system is

Accepted Answer

A) the area beneath the market demand curve and above the market clearing price plus the area above the market supply curve and beneath the market clearing price. 
B) the area beneath the market supply curve and above the market clearing price plus the area above the market demand curve and beneath the market clearing price. 
C) the area beneath the market demand curve and above the market clearing price minus the area beneath the market supply curve and beneath the market clearing price. 
D) always equal to zero. 
A) the area beneath the market demand curve and above the market clearing price plus the area above the market supply curve and beneath the market clearing price. 
B) the area beneath the market supply curve and above the market clearing price plus the area above the market demand curve and beneath the market clearing price. 
C) the area beneath the market demand curve and above the market clearing price minus the area beneath the market supply curve and beneath the market clearing price. 
D) always equal to zero.

Question 16

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

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 17

Relative scarcities are indicated by

Accepted Answer

A) supply and demand being out of equilibrium. 
B) surpluses. 
C) excess demand and excess supply. 
D) relative prices. 
A) supply and demand being out of equilibrium. 
B) surpluses. 
C) excess demand and excess supply. 
D) relative prices.

Question 18

When a market clearing price is determined,

Accepted Answer

A) the exchange between buyers and sellers is voluntary. 
B) the exchange between buyers and sellers is directed by outside factors such as the government. 
C) the exchange between buyers and sellers benefits only the buyers. 
D) the exchange between buyers and sellers benefits only the sellers. 
A) the exchange between buyers and sellers is voluntary. 
B) the exchange between buyers and sellers is directed by outside factors such as the government. 
C) the exchange between buyers and sellers benefits only the buyers. 
D) the exchange between buyers and sellers benefits only the sellers.

Question 19

An increase in the equilibrium quantity of good X can be caused by

Accepted Answer

A) an increase the price of inputs utilized in producing good X. 
B) an increase in the price of good X. 
C) a technological improvement in the process of producing good X. 
D) a reduction in the number of producers of good X. 
A) an increase the price of inputs utilized in producing good X. 
B) an increase in the price of good X. 
C) a technological improvement in the process of producing good X. 
D) a reduction in the number of producers of good X.

Question 20

In September 2005,destruction to U.S.gasoline refineries was caused by back-to-back storms along the U.S.Gulf Coast-Hurricane Katrina and Hurricane Rita.In one week,the average price of a gallon of gasoline in the United States increased by about 40 cents.Which of the following best explains why these events pushed up the price of gasoline?

Accepted Answer

A) The demand curve for gasoline shifted to the left along the supply curve for gasoline. 
B) The supply curve for gasoline shifted to the left along the demand curve for gasoline. 
C) The demand curve for gasoline shifted to the right along the supply curve for gasoline. 
D) The supply curve for gasoline shifted to the right along the demand curve for gasoline. 
A) The demand curve for gasoline shifted to the left along the supply curve for gasoline. 
B) The supply curve for gasoline shifted to the left along the demand curve for gasoline. 
C) The demand curve for gasoline shifted to the right along the supply curve for gasoline. 
D) The supply curve for gasoline shifted to the right along the demand curve for gasoline.

A price ceiling set above the equilibrium price will cause which of the following?

An import quota will

Which of the following is NOT a function of rental prices?

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

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

What has been the market outcome of government-enforced price floors for agricultural products?

-Refer to the above figure.If a price floor of $5 was set,

In a city that has rent control for apartments,there is

The market for gasoline in May is in equilibrium,at a market clearing price of $4.50 per gallon.After Memorial Day,the demand curve for gasoline increases,which causes

A price ceiling established below the market clearing price will usually cause

One result of the agriculture price supports cited in the text is that

If the demand for a product rises and the supply stays the same

In order to be effective,a price floor

The total gains from trade within a price system is

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

Relative scarcities are indicated by

When a market clearing price is determined,

An increase in the equilibrium quantity of good X can be caused by

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

A price ceiling set above the equilibrium price will cause which of the following?

An import quota will

Which of the following is NOT a function of rental prices?

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

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

What has been the market outcome of government-enforced price floors for agricultural products?

-Refer to the above figure.If a price floor of $5 was set,

In a city that has rent control for apartments,there is

The market for gasoline in May is in equilibrium,at a market clearing price of $4.50 per gallon.After Memorial Day,the demand curve for gasoline increases,which causes

A price ceiling established below the market clearing price will usually cause

One result of the agriculture price supports cited in the text is that

If the demand for a product rises and the supply stays the same

In order to be effective,a price floor

The total gains from trade within a price system is

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

Relative scarcities are indicated by

When a market clearing price is determined,

An increase in the equilibrium quantity of good X can be caused by

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