Question 1

The ________ automatically distributes scarce goods.

Accepted Answer

A)  price system 
B)  barter system 
C)  laissez-faire economy 
D)  command economy 
A)  price system 
B)  barter system 
C)  laissez-faire economy 
D)  command economy

Question 2

Attempts to bypass price rationing in the market

Accepted Answer

A)  are efficient. 
B)  are easily administered. 
C)  are costly. 
D)  always fail. 
A)  are efficient. 
B)  are easily administered. 
C)  are costly. 
D)  always fail.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

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. If the United States then imposes a $25 tax per barrel of imported oil, the tax revenue generated will equal

Accepted Answer

A)  $25 million per day. 
B)  $50 million per day. 
C)  $100 million per day. 
D)  $125 million per day. 
A)  $25 million per day. 
B)  $50 million per day. 
C)  $100 million per day. 
D)  $125 million per day.

Question 5

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

Accepted Answer

A) True 
 B)False

Question 6

If a price floor 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)  the floor will be ineffective. 
A)  quantity demanded will equal quantity supplied. 
B)  there will be a surplus. 
C)  there will be a shortage. 
D)  the floor will be ineffective.

Question 7

If the most someone is willing to pay for ticket to see their favorite team is $100 and the market price of the ticket is $35, then this buyer will get consumer surplus of

Accepted Answer

A)  1 ticket. 
B)  $35. 
C)  $65. 
D)  $100. 
A)  1 ticket. 
B)  $35. 
C)  $65. 
D)  $100.

Question 8

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 [E + F + G] 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.

Question 9

A maximum price, set by the government, that sellers may charge for a good is known as

Accepted Answer

A)  a price floor. 
B)  a price rationing mechanism. 
C)  a price ceiling. 
D)  a subsidy. 
A)  a price floor. 
B)  a price rationing mechanism. 
C)  a price ceiling. 
D)  a subsidy.

Question 10

If the equilibrium price of gasoline is $3.00 per gallon and the government will not allow oil companies to charge more than $2.00 per gallon of gasoline, which of the following will happen?

Accepted Answer

A)  The market will be in equilibrium at a price of $2.00. 
B)  Supply must eventually increase so that the market will come into equilibrium at a price of $2.00. 
C)  Demand must eventually decrease so that the market will come into equilibrium at a price of $2.00. 
D)  A nonprice rationing system such as ration coupons must be used to ration the available supply of gasoline. 
A)  The market will be in equilibrium at a price of $2.00. 
B)  Supply must eventually increase so that the market will come into equilibrium at a price of $2.00. 
C)  Demand must eventually decrease so that the market will come into equilibrium at a price of $2.00. 
D)  A nonprice rationing system such as ration coupons must be used to ration the available supply of gasoline.

Question 11

With price rationing, those who are both able and willing to pay for a product get it.

Accepted Answer

A) True 
 B)False

Question 12

The most common of all nonprice rationing systems is

Accepted Answer

A)  ration coupons. 
B)  queuing. 
C)  favored customers. 
D)  price ceilings. 
A)  ration coupons. 
B)  queuing. 
C)  favored customers. 
D)  price ceilings.

Question 13

When supply is fixed, price is supply determined.

Accepted Answer

A) True 
 B)False

Question 14

A U.S. import fee on oil would reduce the domestic quantity of oil 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. At the world price of $15 per CD-Rom drive, the United States imports ________ million CD-Rom drives.

Accepted Answer

A)  3 
B)  6 
C)  9 
D)  12 
A)  3 
B)  6 
C)  9 
D)  12

Question 16

A firm that sells a car for $30,000 gets producer surplus of $30,000.

Accepted Answer

A) True 
 B)False

Question 17

If the government imposes a maximum price that is above the equilibrium price,

Accepted Answer

A)  this maximum price will have no economic impact. 
B)  quantity demanded will be less than quantity supplied. 
C)  demand will be greater than supply. 
D)  the available supply will have to be rationed with a nonprice rationing mechanism. 
A)  this maximum price will have no economic impact. 
B)  quantity demanded will be less than quantity supplied. 
C)  demand will be greater than supply. 
D)  the available supply will have to be rationed with a nonprice rationing mechanism.

Question 18

In a "black market,"

Accepted Answer

A)  suppliers take advantage of buyers. 
B)  price is illegally below market price. 
C)  illegal trading at market prices takes place. 
D)  only illegal goods and services are traded. 
A)  suppliers take advantage of buyers. 
B)  price is illegally below market price. 
C)  illegal trading at market prices takes place. 
D)  only illegal goods and services are traded.

Question 19

When supply is ________ or the product is ________, then price is demand determined.

Accepted Answer

A)  fixed; unique 
B)  variable; standardized 
C)  fixed; standardized 
D)  variable; unique 
A)  fixed; unique 
B)  variable; standardized 
C)  fixed; standardized 
D)  variable; unique

Question 20

Establishing a list of favored customers is an alternative rationing mechanism to price rationing.

Accepted Answer

A) True 
 B)False

The ________ automatically distributes scarce goods.

Attempts to bypass price rationing in the market

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

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

If a price floor is set above the equilibrium price,

If the most someone is willing to pay for ticket to see their favorite team is $100 and the market price of the ticket is $35, then this buyer will get consumer surplus 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 area of [E + F + G] represents

A maximum price, set by the government, that sellers may charge for a good is known as

If the equilibrium price of gasoline is $3.00 per gallon and the government will not allow oil companies to charge more than $2.00 per gallon of gasoline, which of the following will happen?

With price rationing, those who are both able and willing to pay for a product get it.

The most common of all nonprice rationing systems is

When supply is fixed, price is supply determined.

A U.S. import fee on oil would reduce the domestic quantity of oil 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. At the world price of $15 per CD-Rom drive, the United States imports ________ million CD-Rom drives.

A firm that sells a car for $30,000 gets producer surplus of $30,000.

If the government imposes a maximum price that is above the equilibrium price,

In a "black market,"

When supply is or the product is , then price is demand determined.

Establishing a list of favored customers is an alternative rationing mechanism to price rationing.

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

The ________ automatically distributes scarce goods.

Attempts to bypass price rationing in the market

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

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

If a price floor is set above the equilibrium price,

If the most someone is willing to pay for ticket to see their favorite team is $100 and the market price of the ticket is $35, then this buyer will get consumer surplus 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 area of [E + F + G] represents

A maximum price, set by the government, that sellers may charge for a good is known as

If the equilibrium price of gasoline is $3.00 per gallon and the government will not allow oil companies to charge more than $2.00 per gallon of gasoline, which of the following will happen?

With price rationing, those who are both able and willing to pay for a product get it.

The most common of all nonprice rationing systems is

When supply is fixed, price is supply determined.

A U.S. import fee on oil would reduce the domestic quantity of oil 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. At the world price of $15 per CD-Rom drive, the United States imports ________ million CD-Rom drives.

A firm that sells a car for $30,000 gets producer surplus of $30,000.

If the government imposes a maximum price that is above the equilibrium price,

In a "black market,"

When supply is ________ or the product is ________, then price is demand determined.

Establishing a list of favored customers is an alternative rationing mechanism to price rationing.

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

When supply is or the product is , then price is demand determined.