Question 1

Goods are allocated in a market system by price rationing.

Accepted Answer

A) True 
 B)False

Question 2

Refer to the information provided in Figure 4.3 below to answer the questions that follow.   Figure 4.3
-Refer to Figure 4.3. The government setting the price of pencils at $0.50 would be an example of an effective

Accepted Answer

A)  price floor. 
B)  price ceiling. 
C)  market equilibrium. 
D)  price shortage. 
A)  price floor. 
B)  price ceiling. 
C)  market equilibrium. 
D)  price shortage.

Question 3

Producer surplus describes a situation in which there is excess quantity demanded.

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,

Accepted Answer

A)  the quantity of oil demanded will be reduced by 4 million barrels per day. 
B)  the quantity of oil supplied by U.S. firms will increase by 8 million barrels per day. 
C)  U.S. imports of oil will increase by 4 million barrels per day. 
D)  the price of oil in the U.S. will increase to $150 per barrel. 
A)  the quantity of oil demanded will be reduced by 4 million barrels per day. 
B)  the quantity of oil supplied by U.S. firms will increase by 8 million barrels per day. 
C)  U.S. imports of oil will increase by 4 million barrels per day. 
D)  the price of oil in the U.S. will increase to $150 per barrel.

Question 5

On a graph, consumer surplus is the area above the equilibrium price and below the demand curve.

Accepted Answer

A) True 
 B)False

Question 6

Related to the Economics in Practice on page 81: When acquiring a ticket for a play takes a significant amount of time, the true economic cost of that ticket would include all of the following factors except

Accepted Answer

A)  the amount of time spent acquiring the ticket. 
B)  the utility provided by seeing the play. 
C)  the earning power of the person acquiring the ticket. 
D)  the purchase price of the ticket. 
A)  the amount of time spent acquiring the ticket. 
B)  the utility provided by seeing the play. 
C)  the earning power of the person acquiring the ticket. 
D)  the purchase price of the ticket.

Question 7

People scalping tickets for a jazz festival will be successful at selling the tickets for a profit

Accepted Answer

A)  any time the jazz festival is popular. 
B)  when the price set by the festival organizers is less than the market equilibrium price. 
C)  when prices are too high. 
D)  only when there is excess supply. 
A)  any time the jazz festival is popular. 
B)  when the price set by the festival organizers is less than the market equilibrium price. 
C)  when prices are too high. 
D)  only when there is excess supply.

Question 8

The type of nonprice rationing that most closely approaches the market outcome is

Accepted Answer

A)  coupon rationing with coupons that can be resold. 
B)  coupon rationing with coupons that cannot be resold. 
C)  first-come, first-served basis or queuing. 
D)  favored customer rationing. 
A)  coupon rationing with coupons that can be resold. 
B)  coupon rationing with coupons that cannot be resold. 
C)  first-come, first-served basis or queuing. 
D)  favored customer rationing.

Question 9

A price ceiling 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 10

Consumer surplus is

Accepted Answer

A)  the difference between the maximum a person is willing to pay and current market price. 
B)  the difference between current market price and full costs of production for the firm. 
C)  the difference between the maximum a person is willing to pay and full costs of productions for the firm. 
D)  current market price. 
A)  the difference between the maximum a person is willing to pay and current market price. 
B)  the difference between current market price and full costs of production for the firm. 
C)  the difference between the maximum a person is willing to pay and full costs of productions for the firm. 
D)  current market price.

Question 11

The benefit of a price floor to ________ is ________.

Accepted Answer

A)  producers; the selling price of the product is above the equilibrium price 
B)  producers; the floor creates excess demand 
C)  consumers; the selling price of the product is below the equilibrium price 
D)  consumers; the floor creates excess supply 
A)  producers; the selling price of the product is above the equilibrium price 
B)  producers; the floor creates excess demand 
C)  consumers; the selling price of the product is below the equilibrium price 
D)  consumers; the floor creates excess supply

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. The United States will import 2 million barrels of oil per day if a ________ per barrel tax is levied on imported oil.

Accepted Answer

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

Question 13

Favored customers receive special treatment from dealers during periods of excess demand.

Accepted Answer

A) True 
 B)False

Question 14

An example of an effective price ceiling would be the government setting the price of wheat at ________ per bushel when the market price is at $4.25 per bushel.

Accepted Answer

A)  $3.75 
B)  $4.25 
C)  $7.75 
D)  $12.00 
A)  $3.75 
B)  $4.25 
C)  $7.75 
D)  $12.00

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. If the United States eliminates all taxes on CD-Rom drives, which of the following would occur?

Accepted Answer

A)  The price of CD-Rom drives in the United States would be $15 per CD-Rom drive, and the United States would import 3 million CD-Rom drives. 
B)  The price of CD-Rom drives in the United States would be $25 per CD-Rom drive, and the United States would import 3 million CD-Rom drives. 
C)  The price of CD-Rom drives in the United States would be $15 per CD-Rom drive, and the United States would import 9 million CD-Rom drives. 
D)  The price of CD-Rom drives in the United States after the U.S. government eliminated all taxes on imported CD-Rom drives cannot be determined from this information. 
A)  The price of CD-Rom drives in the United States would be $15 per CD-Rom drive, and the United States would import 3 million CD-Rom drives. 
B)  The price of CD-Rom drives in the United States would be $25 per CD-Rom drive, and the United States would import 3 million CD-Rom drives. 
C)  The price of CD-Rom drives in the United States would be $15 per CD-Rom drive, and the United States would import 9 million CD-Rom drives. 
D)  The price of CD-Rom drives in the United States after the U.S. government eliminated all taxes on imported CD-Rom drives cannot be determined from this information.

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. The United States imports 9 million CD-Rom drives at a world price of ________ per CD-Rom drive.

Accepted Answer

A)  $15 
B)  $25 
C)  between $15 and $25 
D)  >$25 
A)  $15 
B)  $25 
C)  between $15 and $25 
D)  >$25

Question 17

An effective price floor results in a shortage.

Accepted Answer

A) True 
 B)False

Question 18

Queuing, or waiting in line, is an alternative rationing mechanism to price rationing.

Accepted Answer

A) True 
 B)False

Question 19

The government imposes a maximum price on apartments that is above 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 20

People scalping tickets for the Super Bowl will be successful at selling the tickets for a profit

Accepted Answer

A)  any time the Super Bowl is popular. 
B)  when prices are too high. 
C)  when the price set by the National Football League is less than the market equilibrium price. 
D)  only when there is excess supply. 
A)  any time the Super Bowl is popular. 
B)  when prices are too high. 
C)  when the price set by the National Football League is less than the market equilibrium price. 
D)  only when there is excess supply.

Exam 4: Demand and Supply Applications

Goods are allocated in a market system by price rationing.

Refer to the information provided in Figure 4.3 below to answer the questions that follow. Figure 4.3 -Refer to Figure 4.3. The government setting the price of pencils at $0.50 would be an example of an effective

Producer surplus describes a situation in which there is excess quantity demanded.

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,

On a graph, consumer surplus is the area above the equilibrium price and below the demand curve.

Related to the Economics in Practice on page 81: When acquiring a ticket for a play takes a significant amount of time, the true economic cost of that ticket would include all of the following factors except

People scalping tickets for a jazz festival will be successful at selling the tickets for a profit

The type of nonprice rationing that most closely approaches the market outcome is

A price ceiling is

Consumer surplus is

The benefit of a price floor to ________ is ________.

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 United States will import 2 million barrels of oil per day if a ________ per barrel tax is levied on imported oil.

Favored customers receive special treatment from dealers during periods of excess demand.

An example of an effective price ceiling would be the government setting the price of wheat at ________ per bushel when the market price is at $4.25 per bushel.

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 the United States eliminates all taxes on CD-Rom drives, which of the following would occur?

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 imports 9 million CD-Rom drives at a world price of ________ per CD-Rom drive.

An effective price floor results in a shortage.

Queuing, or waiting in line, is an alternative rationing mechanism to price rationing.

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

People scalping tickets for the Super Bowl will be successful at selling the tickets for a profit

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 benefit of a price floor to is .