Question 1

A decrease in supply causes what changes in a market?

Accepted Answer

A)  Price increases, and quantity decreases. 
B)  Price decreases, and quantity increases. 
C)  Price increases, and quantity increases. 
D)  Price decreases, and quantity decreases. 
A)  Price increases, and quantity decreases. 
B)  Price decreases, and quantity increases. 
C)  Price increases, and quantity increases. 
D)  Price decreases, and quantity decreases.

Question 2

When supply decreases and demand increases, what happens to equilibrium price and quantity?

Accepted Answer

A)  Price decreases, and quantity doesn't change. 
B)  Price increases, and quantity decreases. 
C)  Price increases; we don't know the effect on quantity without knowing which shift is larger. 
D)  Price decreases; we don't know the effect on the quantity without knowing which shift is larger. 
A)  Price decreases, and quantity doesn't change. 
B)  Price increases, and quantity decreases. 
C)  Price increases; we don't know the effect on quantity without knowing which shift is larger. 
D)  Price decreases; we don't know the effect on the quantity without knowing which shift is larger.

Question 3

An auction is being held to sell one vintage automobile. Two hundred potential buyers arrive to place bids on the auto. At the start of the auction, a _____ exists, and there is pressure on the price to _____.

Accepted Answer

A)  shortage; fall 
B)  surplus; fall 
C)  surplus; rise 
D)  shortage; rise 
A)  shortage; fall 
B)  surplus; fall 
C)  surplus; rise 
D)  shortage; rise

Question 4

Use Table: Supply and Demand Schedule for Walking Tours. What price would be an effective price floor, and how much would be sold?
​

Accepted Answer

A)  The price is $30, and the quantity is 70. 
B)  The price is $10, and the quantity is 30. 
C)  The price is $50, and the quantity is 50. 
D)  The price is $40, and the quantity is 0. 
A)  The price is $30, and the quantity is 70. 
B)  The price is $10, and the quantity is 30. 
C)  The price is $50, and the quantity is 50. 
D)  The price is $40, and the quantity is 0.

Question 5

What is an equilibrium price in a market, and what happens when the current price of a good is below that equilibrium price?

Accepted Answer

An equilibrium price is the only price t

Question 6

How do the price and quantity change for lawn chairs if the price of outdoor grills, a complement in consumption to lawn chairs, increases?

Accepted Answer

A)  Price increases, and quantity decreases. 
B)  Price decreases, and quantity increases. 
C)  Price increases, and quantity increases. 
D)  Price decreases, and quantity decreases. 
A)  Price increases, and quantity decreases. 
B)  Price decreases, and quantity increases. 
C)  Price increases, and quantity increases. 
D)  Price decreases, and quantity decreases.

Question 7

A tax on a good or service bought from another country is:

Accepted Answer

A)  an ad valorem tax. 
B)  an excise tax. 
C)  a tariff. 
D)  an export duty. 
A)  an ad valorem tax. 
B)  an excise tax. 
C)  a tariff. 
D)  an export duty.

Question 8

Use Figure: The Market for Aluminum. What area represents the deadweight loss created by the price floor in this market?
​
Figure: The Market for Aluminum

Accepted Answer

A)  A 
B)  B 
C)  C 
D)  D 
A)  A 
B)  B 
C)  C 
D)  D

Question 9

A new gaming headset was released at a price of $75. The quantity of gaming headsets supplied is higher than the quantity of gaming headsets demanded at this price. What is true about the market for gaming headsets?

Accepted Answer

A)  It is in equilibrium. 
B)  There is a shortage. 
C)  There is a surplus. 
D)  The price of gaming headsets will not change. 
A)  It is in equilibrium. 
B)  There is a shortage. 
C)  There is a surplus. 
D)  The price of gaming headsets will not change.

Question 10

Black markets tend to emerge when there is:

Accepted Answer

A)  a price floor. 
B)  a price ceiling. 
C)  a surplus. 
D)  an equilibrium. 
A)  a price floor. 
B)  a price ceiling. 
C)  a surplus. 
D)  an equilibrium.

Question 11

How does the price and quantity change for a normal good if consumer income increases?

Accepted Answer

A)  Price increases, and quantity increases. 
B)  Price increases, and quantity decreases. 
C)  Price decreases, and quantity increases. 
D)  Price decreases, and quantity decreases. 
A)  Price increases, and quantity increases. 
B)  Price increases, and quantity decreases. 
C)  Price decreases, and quantity increases. 
D)  Price decreases, and quantity decreases.

Question 12

Use Figure: The Market for Sandwiches. What happens if a price ceiling of $9 is placed on this market?
​
Figure: The Market for Sandwiches

Accepted Answer

A)  The price ceiling would not affect this market. 
B)  There would be a shortage of five sandwiches. 
C)  There would be a surplus of five sandwiches. 
D)  A total of 11 sandwiches will be sold. 
A)  The price ceiling would not affect this market. 
B)  There would be a shortage of five sandwiches. 
C)  There would be a surplus of five sandwiches. 
D)  A total of 11 sandwiches will be sold.

Question 13

Use Table: Supply and Demand Schedule for Walking Tours. What would NOT be an effective price ceiling in this market?
​

Accepted Answer

A)  $10 
B)  $20 
C)  $25 
D)  $40 
A)  $10 
B)  $20 
C)  $25 
D)  $40

Question 14

What happens to price and quantity in each of these scenarios?
a. Incomes increase in the market for an inferior good.
b. The price of a substitute in production decreases.
c. Incomes increase in the market for an inferior good, and the price of a substitute in production decreases.

Accepted Answer

In part a, demand for the product decrea

Question 15

Use Figure: The Market for Sandwiches. What is the equilibrium price and quantity in this market?
​
Figure: The Market for Sandwiches

Accepted Answer

A)  The equilibrium price is $6, and the equilibrium quantity is eight. 
B)  The equilibrium price is $9, and the equilibrium quantity is 12. 
C)  The equilibrium price is $4, and the equilibrium quantity is 12. 
D)  The equilibrium price is $8, and the equilibrium quantity is six. 
A)  The equilibrium price is $6, and the equilibrium quantity is eight. 
B)  The equilibrium price is $9, and the equilibrium quantity is 12. 
C)  The equilibrium price is $4, and the equilibrium quantity is 12. 
D)  The equilibrium price is $8, and the equilibrium quantity is six.

Question 16

Hatch green chiles are used to make green chile scones. Butter is a complement in consumption to green chile scones. What happens to the equilibrium price and quantity in the market for green chile scones if the price of butter decreases, if the price of hatch green chiles decreases, and if we know these changes have a greater effect on supply than on demand?

Accepted Answer

A)  Price increases, and quantity increases. 
B)  Price increases, and quantity decreases. 
C)  Price decreases, and quantity increases. 
D)  Price decreases, and quantity decreases. 
A)  Price increases, and quantity increases. 
B)  Price increases, and quantity decreases. 
C)  Price decreases, and quantity increases. 
D)  Price decreases, and quantity decreases.

Question 17

Use Figure: The Market for Sandwiches. What happens if a price ceiling of $4 is placed on this market?
​
Figure: The Market for Sandwiches

Accepted Answer

A)  The price ceiling would not affect this market. 
B)  There would be a shortage of six sandwiches. 
C)  There would be a surplus of five sandwiches. 
D)  A total of 11 sandwiches will be sold. 
A)  The price ceiling would not affect this market. 
B)  There would be a shortage of six sandwiches. 
C)  There would be a surplus of five sandwiches. 
D)  A total of 11 sandwiches will be sold.

Question 18

What is true about deadweight loss?

Accepted Answer

A)  It occurs only if there is a shortage. 
B)  It occurs only if there is a surplus. 
C)  It occurs in equilibrium. 
D)  It occurs at any time that the quantity sold is not the equilibrium quantity. 
A)  It occurs only if there is a shortage. 
B)  It occurs only if there is a surplus. 
C)  It occurs in equilibrium. 
D)  It occurs at any time that the quantity sold is not the equilibrium quantity.

Question 19

How does the price and quantity change for a crab claws if the price of lobster tails, a substitute in consumption to crab claws, decreases?

Accepted Answer

A)  Price increases, and quantity decreases. 
B)  Price decreases, and quantity increases. 
C)  Price decreases, and quantity decreases. 
D)  Price increases, and quantity increases. 
A)  Price increases, and quantity decreases. 
B)  Price decreases, and quantity increases. 
C)  Price decreases, and quantity decreases. 
D)  Price increases, and quantity increases.

Question 20

Why does an increase in demand cause an increase in a good's equilibrium price?

Accepted Answer

A)  There is a surplus at the old price, which leads firms to charge a higher price. 
B)  There is a shortage at the old price, which leads to firms to charge a higher price. 
C)  An increase in demand causes a price ceiling to be placed on a market. 
D)  At the old price, the quantity demanded is less than the quantity supplied, which leads firms charge a higher price. 
A)  There is a surplus at the old price, which leads firms to charge a higher price. 
B)  There is a shortage at the old price, which leads to firms to charge a higher price. 
C)  An increase in demand causes a price ceiling to be placed on a market. 
D)  At the old price, the quantity demanded is less than the quantity supplied, which leads firms charge a higher price.

A decrease in supply causes what changes in a market?

When supply decreases and demand increases, what happens to equilibrium price and quantity?

An auction is being held to sell one vintage automobile. Two hundred potential buyers arrive to place bids on the auto. At the start of the auction, a _ exists, and there is pressure on the price to _.

Use Table: Supply and Demand Schedule for Walking Tours. What price would be an effective price floor, and how much would be sold?

What is an equilibrium price in a market, and what happens when the current price of a good is below that equilibrium price?

How do the price and quantity change for lawn chairs if the price of outdoor grills, a complement in consumption to lawn chairs, increases?

A tax on a good or service bought from another country is:

Use Figure: The Market for Aluminum. What area represents the deadweight loss created by the price floor in this market? Figure: The Market for Aluminum

A new gaming headset was released at a price of $75. The quantity of gaming headsets supplied is higher than the quantity of gaming headsets demanded at this price. What is true about the market for gaming headsets?

Black markets tend to emerge when there is:

How does the price and quantity change for a normal good if consumer income increases?

Use Figure: The Market for Sandwiches. What happens if a price ceiling of $9 is placed on this market? Figure: The Market for Sandwiches

Use Table: Supply and Demand Schedule for Walking Tours. What would NOT be an effective price ceiling in this market?

What happens to price and quantity in each of these scenarios? a. Incomes increase in the market for an inferior good. b. The price of a substitute in production decreases. c. Incomes increase in the market for an inferior good, and the price of a substitute in production decreases.

Use Figure: The Market for Sandwiches. What is the equilibrium price and quantity in this market? Figure: The Market for Sandwiches

Use Figure: The Market for Sandwiches. What happens if a price ceiling of $4 is placed on this market? Figure: The Market for Sandwiches

What is true about deadweight loss?

How does the price and quantity change for a crab claws if the price of lobster tails, a substitute in consumption to crab claws, decreases?

Why does an increase in demand cause an increase in a good's equilibrium price?

Foundations of Economics

Extension: Understanding Graphs

Markets and Economies

Demand

Supply

Elasticity

Consumer Behavior

Production Costs

Perfect Competition

Market Power

Factor Markets

Market Failure and Government Failure

Measuring an Economys Performance

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money and Banking

Monetary Policy

Economic Growth and Development

International Trade and Finance

Filters

Exam 5: Market Equilibrium

A decrease in supply causes what changes in a market?

When supply decreases and demand increases, what happens to equilibrium price and quantity?

An auction is being held to sell one vintage automobile. Two hundred potential buyers arrive to place bids on the auto. At the start of the auction, a _____ exists, and there is pressure on the price to _____.

Use Table: Supply and Demand Schedule for Walking Tours. What price would be an effective price floor, and how much would be sold? ​

What is an equilibrium price in a market, and what happens when the current price of a good is below that equilibrium price?

How do the price and quantity change for lawn chairs if the price of outdoor grills, a complement in consumption to lawn chairs, increases?

A tax on a good or service bought from another country is:

Use Figure: The Market for Aluminum. What area represents the deadweight loss created by the price floor in this market? ​ Figure: The Market for Aluminum

A new gaming headset was released at a price of $75. The quantity of gaming headsets supplied is higher than the quantity of gaming headsets demanded at this price. What is true about the market for gaming headsets?

Black markets tend to emerge when there is:

How does the price and quantity change for a normal good if consumer income increases?

Use Figure: The Market for Sandwiches. What happens if a price ceiling of $9 is placed on this market? ​ Figure: The Market for Sandwiches

Use Table: Supply and Demand Schedule for Walking Tours. What would NOT be an effective price ceiling in this market? ​

What happens to price and quantity in each of these scenarios? a. Incomes increase in the market for an inferior good. b. The price of a substitute in production decreases. c. Incomes increase in the market for an inferior good, and the price of a substitute in production decreases.

Use Figure: The Market for Sandwiches. What is the equilibrium price and quantity in this market? ​ Figure: The Market for Sandwiches

Use Figure: The Market for Sandwiches. What happens if a price ceiling of $4 is placed on this market? ​ Figure: The Market for Sandwiches

What is true about deadweight loss?

How does the price and quantity change for a crab claws if the price of lobster tails, a substitute in consumption to crab claws, decreases?

Why does an increase in demand cause an increase in a good's equilibrium price?

Foundations of Economics

Extension: Understanding Graphs

Markets and Economies

Demand

Supply

Elasticity

Consumer Behavior

Production Costs

Perfect Competition

Market Power

Factor Markets

Market Failure and Government Failure

Measuring an Economys Performance

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money and Banking

Monetary Policy

Economic Growth and Development

International Trade and Finance

Filters

An auction is being held to sell one vintage automobile. Two hundred potential buyers arrive to place bids on the auto. At the start of the auction, a _ exists, and there is pressure on the price to _.

Use Table: Supply and Demand Schedule for Walking Tours. What price would be an effective price floor, and how much would be sold?

Use Figure: The Market for Aluminum. What area represents the deadweight loss created by the price floor in this market? Figure: The Market for Aluminum

Use Figure: The Market for Sandwiches. What happens if a price ceiling of $9 is placed on this market? Figure: The Market for Sandwiches

Use Table: Supply and Demand Schedule for Walking Tours. What would NOT be an effective price ceiling in this market?

Use Figure: The Market for Sandwiches. What is the equilibrium price and quantity in this market? Figure: The Market for Sandwiches

Use Figure: The Market for Sandwiches. What happens if a price ceiling of $4 is placed on this market? Figure: The Market for Sandwiches