Question 1

Deadweight loss is the difference between consumer surplus and producer surplus.

Accepted Answer

A) True 
 B)False

Question 2

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. The price of oil in the United States would be $125 per barrel, and the United States would import 6 million barrels of oil per day if the United States levies ________ per barrel tax on imported oil.

Accepted Answer

A)  no 
B)  a $25 
C)  a $50 
D)  a $100 
A)  no 
B)  a $25 
C)  a $50 
D)  a $100

Question 3

The total of consumer plus producer surplus is ________ at the market equilibrium.

Accepted Answer

A)  greatest 
B)  smallest 
C)  zero 
D)  negative 
A)  greatest 
B)  smallest 
C)  zero 
D)  negative

Question 4

Refer to the information provided in Figure 4.3 below to answer the questions that follow.   Figure 4.3
-Refer to Figure 4.3. If the government will not allow retailers to charge less than $0.50 for a pencil, which of the following will happen?

Accepted Answer

A)  Demand must eventually increase so that the market will come into equilibrium at a price of $0.50. 
B)  Supply must eventually decrease so that the market will come into equilibrium at a price of $0.50. 
C)  Retailers will have an excess supply of pencils. 
D)  The market will be in equilibrium at a price of $0.50. 
A)  Demand must eventually increase so that the market will come into equilibrium at a price of $0.50. 
B)  Supply must eventually decrease so that the market will come into equilibrium at a price of $0.50. 
C)  Retailers will have an excess supply of pencils. 
D)  The market will be in equilibrium at a price of $0.50.

Question 5

In the short run, whenever excess demand exists, it is necessary to

Accepted Answer

A)  ration the good. 
B)  put the good on sale. 
C)  increase the supply of the good. 
D)  impose a price ceiling on the good. 
A)  ration the good. 
B)  put the good on sale. 
C)  increase the supply of the good. 
D)  impose a price ceiling on the good.

Question 6

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

Accepted Answer

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

Question 7

Refer to the information provided in Figure 4.3 below to answer the questions that follow.   Figure 4.3
-Refer to Figure 4.3. A nonprice rationing system such as queuing must be used to ration the available supply of pencils if the government will not allow retailers to charge more than ________ for a pencil.

Accepted Answer

A)  $0.40 
B)  $0.45 
C)  $0.50 
D)  $0.55 
A)  $0.40 
B)  $0.45 
C)  $0.50 
D)  $0.55

Question 8

The rationing mechanism in market economies is the adjustment of

Accepted Answer

A)  supply. 
B)  demand. 
C)  quantity. 
D)  price. 
A)  supply. 
B)  demand. 
C)  quantity. 
D)  price.

Question 9

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 deadweight loss due to underproduction is area [C + F] if price is

Accepted Answer

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

Question 10

Refer to the information provided in Figure 4.3 below to answer the questions that follow.   Figure 4.3
-Refer to Figure 4.3. Retailers will have an excess supply of pencils if the government will not allow retailers to charge less than ________ for a pencil.

Accepted Answer

A)  $0.50 
B)  $0.45 
C)  $0.40 
D)  the equilibrium price 
A)  $0.50 
B)  $0.45 
C)  $0.40 
D)  the equilibrium price

Question 11

Issuing coupons, waiting in line, and catering to favored customers are all methods of

Accepted Answer

A)  unbiased favoritism. 
B)  exploiting wealth. 
C)  income distribution. 
D)  nonprice rationing. 
A)  unbiased favoritism. 
B)  exploiting wealth. 
C)  income distribution. 
D)  nonprice rationing.

Question 12

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. Assume that initially there is free trade. Tax revenue of $50 million per day will be generated if the United States imposes a ________ tax per barrel on imported oil.

Accepted Answer

A)  $25 
B)  $50 
C)  $100 
D)  $150 
A)  $25 
B)  $50 
C)  $100 
D)  $150

Question 13

A surplus will occur if a ________ is set ________ the equilibrium price.

Accepted Answer

A)  price floor; below 
B)  price floor; above 
C)  price ceiling; above 
D)  price ceiling; below 
A)  price floor; below 
B)  price floor; above 
C)  price ceiling; above 
D)  price ceiling; below

Question 14

Related to the Economics in Practice on page 77: If a hurricane results in the supply of hotel rooms decreasing and the demand for hotel rooms increases, the equilibrium price for hotel rooms ________ and the equilibrium quantity of hotel rooms ________.

Accepted Answer

A)  will increase; will decrease 
B)  will increase; may increase, decrease, or stay the same 
C)  may increase, decrease, or stay the same; will decrease 
D)  may increase, decrease, or stay the same; may increase, decrease, or stay the same 
A)  will increase; will decrease 
B)  will increase; may increase, decrease, or stay the same 
C)  may increase, decrease, or stay the same; will decrease 
D)  may increase, decrease, or stay the same; may increase, decrease, or stay the same

Question 15

In a "black market," goods are traded at market determined prices.

Accepted Answer

A) True 
 B)False

Question 16

Refer to the information provided in Figure 4.5 below to answer the questions that follow.   Figure 4.5
-Refer to Figure 4.5. If a $10.00 per CD-Rom drive tax is levied on imported CD-Rom drives, the United States will

Accepted Answer

A)  import 3 million CD-Rom drives. 
B)  import 6 million CD-Rom drives. 
C)  import 9 million CD-Rom drives. 
D)  import 12 million CD-Rom drives. 
A)  import 3 million CD-Rom drives. 
B)  import 6 million CD-Rom drives. 
C)  import 9 million CD-Rom drives. 
D)  import 12 million CD-Rom drives.

Question 17

Among the methods of nonprice rationing are

Accepted Answer

A)  coupons. 
B)  favored customers. 
C)  waiting in line. 
D)  all of the above 
A)  coupons. 
B)  favored customers. 
C)  waiting in line. 
D)  all of the above

Question 18

Refer to the information provided in Figure 4.1 below to answer the questions that follow.   Figure 4.1
-Refer to Figure 4.1. If a 10-cent-per-apple tax is levied on imported apples, the United States will

Accepted Answer

A)  import 2 million apples per day. 
B)  import 4 million apples per day. 
C)  import 6 million apples per day. 
D)  import 8 million apples per day. 
A)  import 2 million apples per day. 
B)  import 4 million apples per day. 
C)  import 6 million apples per day. 
D)  import 8 million apples per day.

Question 19

A price floor is

Accepted Answer

A)  a minimum price set by government that sellers may charge for a good. 
B)  a maximum price set by government that sellers may charge for a good. 
C)  the difference between the initial equilibrium price and the equilibrium price after a decrease in supply. 
D)  the minimum price that consumers are willing to pay for a good. 
A)  a minimum price set by government that sellers may charge for a good. 
B)  a maximum price set by government that sellers may charge for a good. 
C)  the difference between the initial equilibrium price and the equilibrium price after a decrease in supply. 
D)  the minimum price that consumers are willing to pay for a good.

Question 20

If a price ceiling is set above the equilibrium price,

Accepted Answer

A)  quantity demanded will equal quantity supplied. 
B)  there will be a surplus. 
C)  there will be a shortage. 
D)  demand will be less than supply. 
A)  quantity demanded will equal quantity supplied. 
B)  there will be a surplus. 
C)  there will be a shortage. 
D)  demand will be less than supply.

Deadweight loss is the difference between consumer surplus and producer surplus.

The total of consumer plus producer surplus is ________ at the market equilibrium.

Refer to the information provided in Figure 4.3 below to answer the questions that follow. Figure 4.3 -Refer to Figure 4.3. If the government will not allow retailers to charge less than $0.50 for a pencil, which of the following will happen?

In the short run, whenever excess demand exists, it is necessary to

The harmful effect of a price floor to is .

The rationing mechanism in market economies is the adjustment of

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 deadweight loss due to underproduction is area [C + F] if price is

Refer to the information provided in Figure 4.3 below to answer the questions that follow. Figure 4.3 -Refer to Figure 4.3. Retailers will have an excess supply of pencils if the government will not allow retailers to charge less than ________ for a pencil.

Issuing coupons, waiting in line, and catering to favored customers are all methods of

A surplus will occur if a is set the equilibrium price.

Related to the Economics in Practice on page 77: If a hurricane results in the supply of hotel rooms decreasing and the demand for hotel rooms increases, the equilibrium price for hotel rooms and the equilibrium quantity of hotel rooms .

In a "black market," goods are traded at market determined prices.

Refer to the information provided in Figure 4.5 below to answer the questions that follow. Figure 4.5 -Refer to Figure 4.5. If a $10.00 per CD-Rom drive tax is levied on imported CD-Rom drives, the United States will

Among the methods of nonprice rationing are

Refer to the information provided in Figure 4.1 below to answer the questions that follow. Figure 4.1 -Refer to Figure 4.1. If a 10-cent-per-apple tax is levied on imported apples, the United States will

A price floor is

If a price ceiling is set above the equilibrium price,

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

Deadweight loss is the difference between consumer surplus and producer surplus.

The total of consumer plus producer surplus is ________ at the market equilibrium.

Refer to the information provided in Figure 4.3 below to answer the questions that follow. Figure 4.3 -Refer to Figure 4.3. If the government will not allow retailers to charge less than $0.50 for a pencil, which of the following will happen?

In the short run, whenever excess demand exists, it is necessary to

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

The rationing mechanism in market economies is the adjustment of

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 deadweight loss due to underproduction is area [C + F] if price is

Refer to the information provided in Figure 4.3 below to answer the questions that follow. Figure 4.3 -Refer to Figure 4.3. Retailers will have an excess supply of pencils if the government will not allow retailers to charge less than ________ for a pencil.

Issuing coupons, waiting in line, and catering to favored customers are all methods of

A surplus will occur if a ________ is set ________ the equilibrium price.

Related to the Economics in Practice on page 77: If a hurricane results in the supply of hotel rooms decreasing and the demand for hotel rooms increases, the equilibrium price for hotel rooms ________ and the equilibrium quantity of hotel rooms ________.

In a "black market," goods are traded at market determined prices.

Refer to the information provided in Figure 4.5 below to answer the questions that follow. Figure 4.5 -Refer to Figure 4.5. If a $10.00 per CD-Rom drive tax is levied on imported CD-Rom drives, the United States will

Among the methods of nonprice rationing are

Refer to the information provided in Figure 4.1 below to answer the questions that follow. Figure 4.1 -Refer to Figure 4.1. If a 10-cent-per-apple tax is levied on imported apples, the United States will

A price floor is

If a price ceiling is set above the equilibrium price,

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 floor to is .

A surplus will occur if a is set the equilibrium price.

Related to the Economics in Practice on page 77: If a hurricane results in the supply of hotel rooms decreasing and the demand for hotel rooms increases, the equilibrium price for hotel rooms and the equilibrium quantity of hotel rooms .