Question 1

An effective price ceiling must be set

Accepted Answer

A)  above the equilibrium price. 
B)  below the equilibrium price. 
C)  at the equilibrium price. 
D)  either at or above the equilibrium price. 
A)  above the equilibrium price. 
B)  below the equilibrium price. 
C)  at the equilibrium price. 
D)  either at or above the equilibrium price.

Question 2

A surplus exists when there is excess demand in a market.

Accepted Answer

A) True 
 B)False

Question 3

When supply is fixed or the product is unique, then price is

Accepted Answer

A)  supply determined. 
B)  demand determined. 
C)  government determined. 
D)  indeterminate. 
A)  supply determined. 
B)  demand determined. 
C)  government determined. 
D)  indeterminate.

Question 4

Favored customers are customers who receive special treatment from dealers during periods of

Accepted Answer

A)  excess demand. 
B)  excess supply. 
C)  price above equilibrium. 
D)  equilibrium. 
A)  excess demand. 
B)  excess supply. 
C)  price above equilibrium. 
D)  equilibrium.

Question 5

The total of consumer plus producer surplus is greatest

Accepted Answer

A)  when consumer surplus is maximized. 
B)  when producer surplus is maximized. 
C)  at the market equilibrium. 
D)  all of the above 
A)  when consumer surplus is maximized. 
B)  when producer surplus is maximized. 
C)  at the market equilibrium. 
D)  all of the above

Question 6

The difference between the maximum a person is willing to pay and current market price is known as

Accepted Answer

A)  consumer surplus. 
B)  producer surplus. 
C)  market surplus. 
D)  nonprice surplus. 
A)  consumer surplus. 
B)  producer surplus. 
C)  market surplus. 
D)  nonprice surplus.

Question 7

An effective price floor must be set

Accepted Answer

A)  above the equilibrium price. 
B)  below the equilibrium price. 
C)  at the equilibrium price. 
D)  either at or below the equilibrium price. 
A)  above the equilibrium price. 
B)  below the equilibrium price. 
C)  at the equilibrium price. 
D)  either at or below the equilibrium price.

Question 8

Refer to the information provided in Figure 4.5 below to answer the question(s) that follow.   Figure 4.5
-Refer to Figure 4.5. If a $10.00 per CD-Rom drive tariff 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 9

The government imposes a maximum price on apartments that is below 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 10

Refer to the information provided in Figure 4.4 below to answer the question(s) 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 tariff 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 11

A shortage occurs when there is an excess supply in a market.

Accepted Answer

A) True 
 B)False

Question 12

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 13

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.

Question 14

Refer to the information provided in Figure 4.1 below to answer the question(s) that follow.   Figure 4.1
-Refer to Figure 4.1. The United States will import 6 million apples per day if a per-apple tax of ________ is levied on imported apples.

Accepted Answer

A)  0 cents 
B)  10 cents 
C)  20 cents 
D)  30 cents 
A)  0 cents 
B)  10 cents 
C)  20 cents 
D)  30 cents

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Refer to the information provided in Figure 4.1 below to answer the question(s) that follow.   Figure 4.1
-Refer to Figure 4.1. At the world price of 30 cents per apple, the United States imports ________ million apples per day.

Accepted Answer

A)  2 
B)  4 
C)  6 
D)  10 
A)  2 
B)  4 
C)  6 
D)  10

Question 17

Refer to the information provided in Figure 4.5 below to answer the question(s) 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 18

Refer to the information provided in Figure 4.5 below to answer the question(s) 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 19

A minimum 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 20

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

Exam 4: Demand and Supply Applications

An effective price ceiling must be set

A surplus exists when there is excess demand in a market.

When supply is fixed or the product is unique, then price is

Favored customers are customers who receive special treatment from dealers during periods of

The total of consumer plus producer surplus is greatest

The difference between the maximum a person is willing to pay and current market price is known as

An effective price floor must be set

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

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

Refer to the information provided in Figure 4.4 below to answer the question(s) 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 tariff per barrel of imported oil,

A shortage occurs when there is an excess supply in a market.

Attempts to bypass price rationing in the market

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

Refer to the information provided in Figure 4.1 below to answer the question(s) that follow. Figure 4.1 -Refer to Figure 4.1. The United States will import 6 million apples per day if a per-apple tax of ________ is levied on imported apples.

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

Refer to the information provided in Figure 4.1 below to answer the question(s) that follow. Figure 4.1 -Refer to Figure 4.1. At the world price of 30 cents per apple, the United States imports ________ million apples per day.

Refer to the information provided in Figure 4.5 below to answer the question(s) 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.

Refer to the information provided in Figure 4.5 below to answer the question(s) 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.

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

The benefit of a price floor to ________ is ________.

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Elasticity

Household Behavior and Consumer Choice

The Production Process: the Behavior of Profit-Maximizing Firms

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: the Labor and Land Markets

Input Demand: the Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Common Resources

Uncertainty and Asymmetric Information

Income Distribution and Poverty

Public Finance: the Economics of Taxation

International Trade, Comparative Advantage, and Protectionism

Economic Growth in Developing Economies

Critical Thinking About Research

Filters

The benefit of a price floor to is .