Question 1

Which of the following will tend to occur if price controls are imposed on a product?

Accepted Answer

A)  persistent shortages 
B)  illegal markets 
C)  illicit channels of distribution 
D)  industry investment slows or stops 
E)  All of the above are correct. 
A)  persistent shortages 
B)  illegal markets 
C)  illicit channels of distribution 
D)  industry investment slows or stops 
E)  All of the above are correct.

Question 2

The price of coal fell and the quantity sold also fell.Everything else being equal,it is consistent that

Accepted Answer

A)  the price of oil fell. 
B)  coal miners received large wage increases. 
C)  more efficient mining equipment was installed. 
D)  consumer incomes rose. 
E)  the supply of coal fell. 
A)  the price of oil fell. 
B)  coal miners received large wage increases. 
C)  more efficient mining equipment was installed. 
D)  consumer incomes rose. 
E)  the supply of coal fell.

Question 3

If price rises,what happens to supply for a product?

Accepted Answer

A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  Uncertain-economic theory has no answer to this question. 
A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  Uncertain-economic theory has no answer to this question.

Question 4

At equilibrium,the market will clear,with no surpluses or shortages occurring.

Accepted Answer

A) True 
 B)False

Question 5

Explain the effect of the following changes on equilibrium price and quantity of a commodity:
(a)
increase in average incomes.
(b)
increase in population.

Accepted Answer

If average incomes rise,consumers will p

Question 6

Any factor that shifts the demand curve to the left but does not affect the supply curve will lower the equilibrium price and raise the equilibrium quantity.

Accepted Answer

A) True 
 B)False

Question 7

Sugar price supports primarily benefit consumers.

Accepted Answer

A) True 
 B)False

Question 8

Price ceilings are designed to protect sellers,while price floors are designed to protect buyers.

Accepted Answer

A) True 
 B)False

Question 9

The price for labor is the wage rate.What happens to the quantity of labor demanded if wages increase?

Accepted Answer

A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  The whole demand schedule shifts to the left. 
A)  It increases. 
B)  It decreases. 
C)  It does not change. 
D)  The whole demand schedule shifts to the left.

Question 10

Price floors set a legal minimum price on a product or commodity.

Accepted Answer

A) True 
 B)False

Question 11

Economists emphasize the importance of ____ in analyzing demand.

Accepted Answer

A)  quantity 
B)  market potential 
C)  wants and needs 
D)  price 
E)  sales opportunities 
A)  quantity 
B)  market potential 
C)  wants and needs 
D)  price 
E)  sales opportunities

Question 12

An upward-sloping supply curve shows that

Accepted Answer

A)  buyers are willing to pay more for a scarce product. 
B)  suppliers are willing to increase production of their goods if they can receive higher prices for them. 
C)  buyers are unaffected by sellers' costs of production. 
D)  the price of a product is not influenced by the price buyers are willing to pay. 
E)  at higher prices,an envy effect begins to affect the demand curve. 
A)  buyers are willing to pay more for a scarce product. 
B)  suppliers are willing to increase production of their goods if they can receive higher prices for them. 
C)  buyers are unaffected by sellers' costs of production. 
D)  the price of a product is not influenced by the price buyers are willing to pay. 
E)  at higher prices,an envy effect begins to affect the demand curve.

Question 13

A cold winter will increase the quantity of heating fuel demanded at every price.

Accepted Answer

A) True 
 B)False

Question 14

A common misperception about consumer demand is that

Accepted Answer

A)  demand depends on many other variables. 
B)  price is a major determinant of quantity. 
C)  it is a fixed amount. 
D)  quantity cannot be determined in advance. 
E)  All of the above are correct. 
A)  demand depends on many other variables. 
B)  price is a major determinant of quantity. 
C)  it is a fixed amount. 
D)  quantity cannot be determined in advance. 
E)  All of the above are correct.

Question 15

When used in a professional or technical sense,the law of supply and demand refers to

Accepted Answer

A)  some vague influences on economic affairs. 
B)  the fact that prices go up when commodities are scarce. 
C)  the market forces that show how prices and quantities are determined. 
D)  the controls that regulate the amount of scarce goods that each consumer can purchase. 
A)  some vague influences on economic affairs. 
B)  the fact that prices go up when commodities are scarce. 
C)  the market forces that show how prices and quantities are determined. 
D)  the controls that regulate the amount of scarce goods that each consumer can purchase.

Question 16

Which of the following would cause an increase in demand for Toyota automobiles?

Accepted Answer

A)  an increase in the price of Toyota automobiles 
B)  a decrease in the price of Toyota automobiles 
C)  a decrease in the price of Honda automobiles 
D)  an increase in the price of Honda automobiles 
A)  an increase in the price of Toyota automobiles 
B)  a decrease in the price of Toyota automobiles 
C)  a decrease in the price of Honda automobiles 
D)  an increase in the price of Honda automobiles

Question 17

The slope of a demand curve is almost always

Accepted Answer

A)  positive,because when people buy more of a good the cost of producing it will rise. 
B)  positive,because the more money a person has,the more of a particular good will be bought. 
C)  negative,because when people buy more of a good the cost of producing it will fall. 
D)  negative,because with everything else equal,the same people will buy more of a good when its price is lower. 
E)  positive,because as the price rises,people want to sell more of the good. 
A)  positive,because when people buy more of a good the cost of producing it will rise. 
B)  positive,because the more money a person has,the more of a particular good will be bought. 
C)  negative,because when people buy more of a good the cost of producing it will fall. 
D)  negative,because with everything else equal,the same people will buy more of a good when its price is lower. 
E)  positive,because as the price rises,people want to sell more of the good.

Question 18

Figure 4-20  
-Refer to Table 4-1.At $10,what is the surplus?

Accepted Answer

A)  4,500 
B)  3,000 
C)  1,500 
D)  0 
A)  4,500 
B)  3,000 
C)  1,500 
D)  0

Question 19

Technological advances shift the supply curve rightward.

Accepted Answer

A) True 
 B)False

Question 20

In a move to free the economy from unnecessary regulation,Congress decides to remove sugar price supports.What would most likely happen to the number of producers of sugar?

Accepted Answer

A)  It would decrease,because sugar prices would fall. 
B)  It would decrease,because sugar prices would rise. 
C)  It would increase,because sugar prices would fall. 
D)  It would increase,because sugar prices would rise. 
A)  It would decrease,because sugar prices would fall. 
B)  It would decrease,because sugar prices would rise. 
C)  It would increase,because sugar prices would fall. 
D)  It would increase,because sugar prices would rise.

Which of the following will tend to occur if price controls are imposed on a product?

The price of coal fell and the quantity sold also fell.Everything else being equal,it is consistent that

If price rises,what happens to supply for a product?

At equilibrium,the market will clear,with no surpluses or shortages occurring.

Explain the effect of the following changes on equilibrium price and quantity of a commodity: (a) increase in average incomes. (b) increase in population.

Any factor that shifts the demand curve to the left but does not affect the supply curve will lower the equilibrium price and raise the equilibrium quantity.

Sugar price supports primarily benefit consumers.

Price ceilings are designed to protect sellers,while price floors are designed to protect buyers.

The price for labor is the wage rate.What happens to the quantity of labor demanded if wages increase?

Price floors set a legal minimum price on a product or commodity.

Economists emphasize the importance of ____ in analyzing demand.

An upward-sloping supply curve shows that

A cold winter will increase the quantity of heating fuel demanded at every price.

A common misperception about consumer demand is that

When used in a professional or technical sense,the law of supply and demand refers to

Which of the following would cause an increase in demand for Toyota automobiles?

The slope of a demand curve is almost always

Figure 4-20 -Refer to Table 4-1.At $10,what is the surplus?

Technological advances shift the supply curve rightward.

In a move to free the economy from unnecessary regulation,Congress decides to remove sugar price supports.What would most likely happen to the number of producers of sugar?

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

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Exam 4: Supply and Demand An Initial Look

Which of the following will tend to occur if price controls are imposed on a product?

The price of coal fell and the quantity sold also fell.Everything else being equal,it is consistent that

If price rises,what happens to supply for a product?

At equilibrium,the market will clear,with no surpluses or shortages occurring.

Explain the effect of the following changes on equilibrium price and quantity of a commodity: (a) increase in average incomes. (b) increase in population.

Any factor that shifts the demand curve to the left but does not affect the supply curve will lower the equilibrium price and raise the equilibrium quantity.

Sugar price supports primarily benefit consumers.

Price ceilings are designed to protect sellers,while price floors are designed to protect buyers.

The price for labor is the wage rate.What happens to the quantity of labor demanded if wages increase?

Price floors set a legal minimum price on a product or commodity.

Economists emphasize the importance of ____ in analyzing demand.

An upward-sloping supply curve shows that

A cold winter will increase the quantity of heating fuel demanded at every price.

A common misperception about consumer demand is that

When used in a professional or technical sense,the law of supply and demand refers to

Which of the following would cause an increase in demand for Toyota automobiles?

The slope of a demand curve is almost always

Figure 4-20 -Refer to Table 4-1.At $10,what is the surplus?

Technological advances shift the supply curve rightward.

In a move to free the economy from unnecessary regulation,Congress decides to remove sugar price supports.What would most likely happen to the number of producers of sugar?

What Is Economics

The Economy Myth and Reality

The Fundamental Economic Problem Scarcity and Choice

An Introduction To Macroeconomics

The Goals Of Macroeconomic Policy

Economic Growth Theory And Policy

Aggregate Demand and The Powerful Consumer

Demand Side Equilibrium Unemployment Or Inflation

Bringing In The Supply Side Unemployment and Inflation

Managing Aggregate Demand Fiscal Policy

Money and The Banking System

Monetary Policy Conventional and Unconventional

The Financial Crisis and The Great Recession

The Debate Over Monetary and Fiscal Policy

Budget Deficits In The Short and Long Run

The Trade Off Between Inflation and Unemployment

International Trade and Comparative Advantage

The International Monetary System Order Or Disorder

Exchange Rates and The Macroeconomy

Filters