Question 1

An effective price ceiling must be set

Accepted Answer

A)  above the equilibrium price. 
B)  below the equilibrium price. 
C)  at the equilibrium price. 
D)  either at or above the equilibrium price. 
A)  above the equilibrium price. 
B)  below the equilibrium price. 
C)  at the equilibrium price. 
D)  either at or above the equilibrium price.

Question 2

The government imposes a maximum price on apartments that is below the equilibrium price. You accurately predict that

Accepted Answer

A)  the law will have no economic impact. 
B)  the law will create a surplus of apartments. 
C)  renters will find that landlords start offering to furnish the apartments. 
D)  landlords are less likely to do routine maintenance work in the apartments. 
A)  the law will have no economic impact. 
B)  the law will create a surplus of apartments. 
C)  renters will find that landlords start offering to furnish the apartments. 
D)  landlords are less likely to do routine maintenance work in the apartments.

Question 3

Refer to the information provided in Figure 4.6 below to answer the questions that follow.
Equilibrium in this market occurs at the intersection of curves S and D.   Figure 4.6
-Refer to Figure 4.6. Producer surplus is area G if price is

Accepted Answer

A)  below P1. 
B)  P1. 
C)  P2. 
D)  P3. 
A)  below P1. 
B)  P1. 
C)  P2. 
D)  P3.

Question 4

Refer to the information provided in Figure 4.1 below to answer the questions that follow.   Figure 4.1
-Refer to Figure 4.1. At the world price of 30 cents per apple the United States imports ________ million apples per day.

Accepted Answer

A)  2 
B)  4 
C)  6 
D)  10 
A)  2 
B)  4 
C)  6 
D)  10

Question 5

A deadweight loss occurs ________ in a market.

Accepted Answer

A)  only when there is overproduction 
B)  only when there is underproduction 
C)  when there is efficient production 
D)  when there is underproduction or overproduction 
A)  only when there is overproduction 
B)  only when there is underproduction 
C)  when there is efficient production 
D)  when there is underproduction or overproduction

Question 6

The harmful effect of a price ceiling to ________ is ________.

Accepted Answer

A)  producers; the selling price of the product is above the equilibrium price 
B)  producers; the ceiling creates a surplus of the product 
C)  consumers; the selling price of the product is above the equilibrium price 
D)  consumers; the ceiling creates a shortage of the product 
A)  producers; the selling price of the product is above the equilibrium price 
B)  producers; the ceiling creates a surplus of the product 
C)  consumers; the selling price of the product is above the equilibrium price 
D)  consumers; the ceiling creates a shortage of the product

Question 7

When there is underproduction in a market,

Accepted Answer

A)  market price is too high. 
B)  there is excess quantity supplied. 
C)  the total of consumer and producer surplus is maximized. 
D)  there is a deadweight loss. 
A)  market price is too high. 
B)  there is excess quantity supplied. 
C)  the total of consumer and producer surplus is maximized. 
D)  there is a deadweight loss.

Question 8

Refer to the information provided in Figure 4.5 below to answer the questions that follow.   Figure 4.5
-Refer to Figure 4.5. The United States will import 3 million CD-Rom drives if ________ tax per CD-Rom drive is levied on imported CD-Rom drives.

Accepted Answer

A)  no 
B)  a $10 
C)  a $15 
D)  a $25 
A)  no 
B)  a $10 
C)  a $15 
D)  a $25

Question 9

Queuing means

Accepted Answer

A)  waiting in line. 
B)  price rationing. 
C)  favoring customers. 
D)  issuing ration coupons. 
A)  waiting in line. 
B)  price rationing. 
C)  favoring customers. 
D)  issuing ration coupons.

Question 10

4.2 Supply and Demand Analysis: An Oil Import Fee
Refer to the information provided in Figure 4.4 below to answer the questions that follow.   Figure 4.4
-Refer to Figure 4.4. At the world price of $125 per barrel of oil, the United States imports ________ million barrels of oil per day.

Accepted Answer

A)  4 
B)  6 
C)  8 
D)  10 
A)  4 
B)  6 
C)  8 
D)  10

Question 11

Refer to the information provided in Figure 4.6 below to answer the questions that follow.
Equilibrium in this market occurs at the intersection of curves S and D.   Figure 4.6
-Refer to Figure 4.6. If price is P1, consumer surplus is area

Accepted Answer

A)  A. 
B)  A + B + E. 
C)  G. 
D)  B + C + E + F + G. 
A)  A. 
B)  A + B + E. 
C)  G. 
D)  B + C + E + F + G.

Question 12

The government imposes a price ceiling on gasoline that is below the market price. You are asked to suggest a rationing scheme that will minimize the misallocation of resources. You suggest

Accepted Answer

A)  using rationing coupons that can be resold. 
B)  using rationing coupons that cannot be resold. 
C)  using rationing on a first-come, first-served basis. 
D)  using rationing only on weekdays. 
A)  using rationing coupons that can be resold. 
B)  using rationing coupons that cannot be resold. 
C)  using rationing on a first-come, first-served basis. 
D)  using rationing only on weekdays.

Question 13

If a price is demand determined, then

Accepted Answer

A)  the supply curve must be horizontal. 
B)  the supply curve must be vertical. 
C)  the demand curve must be vertical. 
D)  the demand curve must be upward sloping. 
A)  the supply curve must be horizontal. 
B)  the supply curve must be vertical. 
C)  the demand curve must be vertical. 
D)  the demand curve must be upward sloping.

Question 14

A U.S. import fee on steel would increase the domestic quantity of steel demanded.

Accepted Answer

A) True 
 B)False

Question 15

Refer to the information provided in Figure 4.5 below to answer the questions that follow.   Figure 4.5
-Refer to Figure 4.5. Assume that initially there is free trade. If the United States then imposes a $10.00 tax per CD-Rom drive on imported CD-Rom drives,

Accepted Answer

A)  the quantity of CD-Rom drives demanded will be reduced by 6 million. 
B)  the quantity of CD-Rom drives supplied by U.S. firms will increase by 3 million. 
C)  the price of CD-Rom drives in the United States will decrease to $5. 
D)  U.S. imports of CD-Rom drives will increase by 3 million. 
A)  the quantity of CD-Rom drives demanded will be reduced by 6 million. 
B)  the quantity of CD-Rom drives supplied by U.S. firms will increase by 3 million. 
C)  the price of CD-Rom drives in the United States will decrease to $5. 
D)  U.S. imports of CD-Rom drives will increase by 3 million.

Question 16

Refer to the information provided in Figure 4.6 below to answer the questions that follow.
Equilibrium in this market occurs at the intersection of curves S and D.   Figure 4.6
-Refer to Figure 4.6. Consumer surplus changes by the area [E - C] if price goes from equilibrium to

Accepted Answer

A)  P1. 
B)  P3. 
C)   P3. 
A)  P1. 
B)  P3. 
C)   P3.

Question 17

If someone is willing to pay $500 to go to the Super Bowl but can buy a ticket for $300, they will get $200 in consumer surplus.

Accepted Answer

A) True 
 B)False

Question 18

In the short run, it is necessary to ________ a good whenever excess demand exists.

Accepted Answer

A)  nonprice ration 
B)  price allocate 
C)  discontinue distribution of 
D)  increase production of 
A)  nonprice ration 
B)  price allocate 
C)  discontinue distribution of 
D)  increase production of

Question 19

Refer to the information provided in Figure 4.5 below to answer the questions that follow.   Figure 4.5
-Refer to Figure 4.5. Assume that initially there is free trade. The quantity of CD-Rom drives supplied by U.S. firms will increase by 3 million CD-Rom drives if the United States then imposes ________ tax per CD-Rom drive on imported CD-Rom drives.

Accepted Answer

A)  no 
B)  a $10 
C)  a $15 
D)  a $25 
A)  no 
B)  a $10 
C)  a $15 
D)  a $25

Question 20

Refer to the information provided in Figure 4.6 below to answer the questions that follow.
Equilibrium in this market occurs at the intersection of curves S and D.   Figure 4.6
-Refer to Figure 4.6. The area of [A + B + C] represents

Accepted Answer

A)  producer surplus. 
B)  consumer surplus. 
C)  consumer surplus plus producer surplus. 
D)  consumer surplus minus producer surplus. 
A)  producer surplus. 
B)  consumer surplus. 
C)  consumer surplus plus producer surplus. 
D)  consumer surplus minus producer surplus.

An effective price ceiling must be set

The government imposes a maximum price on apartments that is below the equilibrium price. You accurately predict that

Refer to the information provided in Figure 4.6 below to answer the questions that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -Refer to Figure 4.6. Producer surplus is area G if price is

Refer to the information provided in Figure 4.1 below to answer the questions that follow. Figure 4.1 -Refer to Figure 4.1. At the world price of 30 cents per apple the United States imports ________ million apples per day.

A deadweight loss occurs ________ in a market.

The harmful effect of a price ceiling to is .

When there is underproduction in a market,

Refer to the information provided in Figure 4.5 below to answer the questions that follow. Figure 4.5 -Refer to Figure 4.5. The United States will import 3 million CD-Rom drives if ________ tax per CD-Rom drive is levied on imported CD-Rom drives.

Queuing means

4.2 Supply and Demand Analysis: An Oil Import Fee Refer to the information provided in Figure 4.4 below to answer the questions that follow. Figure 4.4 -Refer to Figure 4.4. At the world price of $125 per barrel of oil, the United States imports ________ million barrels of oil per day.

Refer to the information provided in Figure 4.6 below to answer the questions that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -Refer to Figure 4.6. If price is P1, consumer surplus is area

The government imposes a price ceiling on gasoline that is below the market price. You are asked to suggest a rationing scheme that will minimize the misallocation of resources. You suggest

If a price is demand determined, then

A U.S. import fee on steel would increase the domestic quantity of steel demanded.

Refer to the information provided in Figure 4.5 below to answer the questions that follow. Figure 4.5 -Refer to Figure 4.5. Assume that initially there is free trade. If the United States then imposes a $10.00 tax per CD-Rom drive on imported CD-Rom drives,

Refer to the information provided in Figure 4.6 below to answer the questions that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -Refer to Figure 4.6. Consumer surplus changes by the area [E - C] if price goes from equilibrium to

If someone is willing to pay $500 to go to the Super Bowl but can buy a ticket for $300, they will get $200 in consumer surplus.

In the short run, it is necessary to ________ a good whenever excess demand exists.

Refer to the information provided in Figure 4.6 below to answer the questions that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -Refer to Figure 4.6. The area of [A + B + C] represents

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Introduction to Macroeconomics

Measuring National Output and National Income

Unemployment, Inflation, and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

Money, the Federal Reserve, and the Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Cost Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, Stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade, Comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing Economies

Critical Thinking About Research

Filters

Exam 4: Demand and Supply Applications

An effective price ceiling must be set

The government imposes a maximum price on apartments that is below the equilibrium price. You accurately predict that

Refer to the information provided in Figure 4.6 below to answer the questions that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -Refer to Figure 4.6. Producer surplus is area G if price is

Refer to the information provided in Figure 4.1 below to answer the questions that follow. Figure 4.1 -Refer to Figure 4.1. At the world price of 30 cents per apple the United States imports ________ million apples per day.

A deadweight loss occurs ________ in a market.

The harmful effect of a price ceiling to ________ is ________.

When there is underproduction in a market,

Refer to the information provided in Figure 4.5 below to answer the questions that follow. Figure 4.5 -Refer to Figure 4.5. The United States will import 3 million CD-Rom drives if ________ tax per CD-Rom drive is levied on imported CD-Rom drives.

Queuing means

4.2 Supply and Demand Analysis: An Oil Import Fee Refer to the information provided in Figure 4.4 below to answer the questions that follow. Figure 4.4 -Refer to Figure 4.4. At the world price of $125 per barrel of oil, the United States imports ________ million barrels of oil per day.

Refer to the information provided in Figure 4.6 below to answer the questions that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -Refer to Figure 4.6. If price is P1, consumer surplus is area

The government imposes a price ceiling on gasoline that is below the market price. You are asked to suggest a rationing scheme that will minimize the misallocation of resources. You suggest

If a price is demand determined, then

A U.S. import fee on steel would increase the domestic quantity of steel demanded.

Refer to the information provided in Figure 4.5 below to answer the questions that follow. Figure 4.5 -Refer to Figure 4.5. Assume that initially there is free trade. If the United States then imposes a $10.00 tax per CD-Rom drive on imported CD-Rom drives,

Refer to the information provided in Figure 4.6 below to answer the questions that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -Refer to Figure 4.6. Consumer surplus changes by the area [E - C] if price goes from equilibrium to

If someone is willing to pay $500 to go to the Super Bowl but can buy a ticket for $300, they will get $200 in consumer surplus.

In the short run, it is necessary to ________ a good whenever excess demand exists.

Refer to the information provided in Figure 4.6 below to answer the questions that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -Refer to Figure 4.6. The area of [A + B + C] represents

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Introduction to Macroeconomics

Measuring National Output and National Income

Unemployment, Inflation, and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

Money, the Federal Reserve, and the Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Cost Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, Stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade, Comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing Economies

Critical Thinking About Research

Filters

The harmful effect of a price ceiling to is .