Question 1

Use the following diagram to solve the following problems.
 
-Refer to Price Per Unit. Suppose the current market price of apartments is $300 per unit. Explain how the market will adjust to an equilibrium position.

Accepted Answer

The answer of Use the following diagram to solve the...

Question 2

Use the following diagram to answer the following questions.
 
-Refer to Case. If the price of soft drinks is $6 per case, the quantity demanded per month is:

Accepted Answer

A)  1 case. 
B)  2 cases. 
C)  3 cases. 
D)  4 cases.

Question 3

Use the following diagram to answer the following questions.
 
-Refer to Unit. If the price of housing is currently $90,000 per unit:

Accepted Answer

A)  there will be a tendency for price to rise. 
B)  there will be a tendency for price to fall. 
C)  prices will remain constant. 
D)  markets will clear.

Question 4

If the price increases from $2 per case to $6 per case, the quantity demanded:

Accepted Answer

A)  will decrease by 2 cases per month. 
B)  will decrease by 4 cases per month. 
C)  will increase by 2 cases per month. 
D)  will increase by 4 cases per month.

Question 5

In a market economy, as producers compete for profits by increasing production:

Accepted Answer

A)  prices will fall. 
B)  prices will rise. 
C)  prices will not be affected by this action. 
D)  prices will at first fall and then increase.

Question 6

Briefly discuss the experience of the former command economies in their attempt to make the transformation to market economies.

Accepted Answer

The answer of Briefly discuss the experience of the former...

Question 7

Suppose the price of an automobile is $20,000. The opportunity cost of the automobile is:

Accepted Answer

A)  $20,000. 
B)  the best alternative use of the $20,000. 
C)  all alternative uses of the $20,000. 
D)  measured by the purchasing power of the $20,000.

Question 8

Which statement is true?

Accepted Answer

A)  Lawlessness in the American Old West and in Modern Russia is based on the same set of social and economic conditions. 
B)  The criminal activity in Modern Russia resembles the gang activity that developed in the United States during Prohibition. 
C)  Gang activity, such as in Russia, is an early stage of capitalism. 
D)  All of the above statements are true.

Question 9

According to most analysts:

Accepted Answer

A)  the transition economies should avoid bankrupting firms until the economies are more firmly established. 
B)  bankruptcies in the transition economies are wasting resources that could be better used in producing goods and services. 
C)  more bankruptcies should be occurring in the transition economies so that resources could be moved into more profitable activities. 
D)  the transition economies have done a good job in creating legislation that allows private and state enterprises to become bankrupt.

Question 10

Use the following diagram to answer the following questions.
 
-Refer to Tea. Suppose the supply for tea decreases from S₁ to S₂. The new equilibrium price and quantity are:

Accepted Answer

A)  P₁ and Q₁, respectively. 
B)  P₁ and Q₂, respectively. 
C)  P₂ and Q₂, respectively. 
D)  P₂ and Q3, respectively.

Question 11

Use the following diagram to answer the following questions.
 
-Refer to Unit. If the price of housing is currently $80,000 per unit:

Accepted Answer

A)  there will be a tendency for price to rise. 
B)  there will be a tendency for price to fall. 
C)  prices will remain constant. 
D)  markets will clear.

Question 12

Suppose the market for oil is initially in equilibrium. As a result of conservation efforts, there is a decrease in the demand for oil. Explain how the market will adjust to this situation.

Accepted Answer

The answer of Suppose the market for oil is initially...

Question 13

Voluntary exchange occurs if at least one party expects to benefit.

Accepted Answer

A) True 
 B)False

Question 14

Demand and supply framework explains prices are formed in a command economy.

Accepted Answer

A) True 
 B)False

Question 15

Excess demand will exist when:

Accepted Answer

A)  market price exceeds the equilibrium price. 
B)  market price is less than the equilibrium price. 
C)  market price is equal to the equilibrium price. 
D)  quantity supplied exceeds quantity demanded.

Question 16

In a competitive market demanders and suppliers are price takers.

Accepted Answer

A) True 
 B)False

Question 17

Use the following diagram to answer the following questions.
 
-Refer to Coffee. Suppose the demand for coffee increases from D₁ to D₂. The new equilibrium price and quantity are:

Accepted Answer

A)  P₁ and Q₁, respectively. 
B)  P₁ and Q₂, respectively. 
C)  P₂ and Q₂, respectively. 
D)  P₂ and Q3, respectively.

Question 18

Briefly discuss the five questions an economic system answers.

Accepted Answer

The answer of Briefly discuss the five questions an economic...

Question 19

Briefly explain how bankruptcy can help an economy to function more efficiently.

Accepted Answer

The answer of Briefly explain how bankruptcy can help an...

Question 20

In a market system:

Accepted Answer

A)  people do not have to generally agree and obey laws. 
B)  no informal rules of conduct are required. 
C)  private property rights are defined, established, and protected by law. 
D)  very few ownership structures must be created.

Exam 2: An Introduction to Economic Systems and the Workings of the Price System

Use the following diagram to solve the following problems. -Refer to Price Per Unit. Suppose the current market price of apartments is $300 per unit. Explain how the market will adjust to an equilibrium position.

Use the following diagram to answer the following questions. -Refer to Case. If the price of soft drinks is $6 per case, the quantity demanded per month is:

Use the following diagram to answer the following questions. -Refer to Unit. If the price of housing is currently $90,000 per unit:

If the price increases from $2 per case to $6 per case, the quantity demanded:

In a market economy, as producers compete for profits by increasing production:

Briefly discuss the experience of the former command economies in their attempt to make the transformation to market economies.

Suppose the price of an automobile is $20,000. The opportunity cost of the automobile is:

Which statement is true?

According to most analysts:

Use the following diagram to answer the following questions. -Refer to Tea. Suppose the supply for tea decreases from S₁ to S₂. The new equilibrium price and quantity are:

Use the following diagram to answer the following questions. -Refer to Unit. If the price of housing is currently $80,000 per unit:

Suppose the market for oil is initially in equilibrium. As a result of conservation efforts, there is a decrease in the demand for oil. Explain how the market will adjust to this situation.

Voluntary exchange occurs if at least one party expects to benefit.

Demand and supply framework explains prices are formed in a command economy.

Excess demand will exist when:

In a competitive market demanders and suppliers are price takers.

Use the following diagram to answer the following questions. -Refer to Coffee. Suppose the demand for coffee increases from D₁ to D₂. The new equilibrium price and quantity are:

Briefly discuss the five questions an economic system answers.

Briefly explain how bankruptcy can help an economy to function more efficiently.

In a market system: