Question 1

An increase in demand and a decrease in supply cause which of the following?

Accepted Answer

A)  Equilibrium price change is indeterminate. 
B)  Equilibrium quantity decreases. 
C)  Equilibrium price falls. 
D)  Equilibrium price rises. 
E)  Equilibrium quantity increases. 
A)  Equilibrium price change is indeterminate. 
B)  Equilibrium quantity decreases. 
C)  Equilibrium price falls. 
D)  Equilibrium price rises. 
E)  Equilibrium quantity increases.

Question 2

Which of the following would be an external cost associated with the manufacture of cigarettes?

Accepted Answer

A)  Price of a pack of cigarettes. 
B)  Price of leaf tobacco. 
C)  Cost to the government of the hospital expenses of indigent smokers. 
D)  Cost to the employer of the higher health insurance premiums due to the hiring of a smoker. 
E)  Cost to the employer of the extra effort lost due to the increased missed days of work as a result of smoking. 
A)  Price of a pack of cigarettes. 
B)  Price of leaf tobacco. 
C)  Cost to the government of the hospital expenses of indigent smokers. 
D)  Cost to the employer of the higher health insurance premiums due to the hiring of a smoker. 
E)  Cost to the employer of the extra effort lost due to the increased missed days of work as a result of smoking.

Question 3

Exhibit 4-11 Data on supply and demand
  
-Which of the following is not an example of market failure?

Accepted Answer

A)  Lack of competition. 
B)  Externalities. 
C)  Equilibrium. 
D)  Extreme income inequality. 
A)  Lack of competition. 
B)  Externalities. 
C)  Equilibrium. 
D)  Extreme income inequality.

Question 4

Exhibit 4-4 Supply and demand curves for good X
  
-A decrease in buyers' income,assuming good X is a normal good,combined with a decrease in the wage rate paid to workers producing good X would be represented by which of the following changes in equilibrium shown in Graph C of Exhibit 4-4?

Accepted Answer

A)  E₁ to E₂. 
B)  E₁ to E₃. 
C)  E₃ to E₂. 
D)  E₁ to E₄. 
A)  E₁ to E₂. 
B)  E₁ to E₃. 
C)  E₃ to E₂. 
D)  E₁ to E₄.

Question 5

Which of the following is not a common effect of imposing a rent control?

Accepted Answer

A)  Discriminatory practices by landlords. 
B)  More time on waiting lists and searching for housing. 
C)  A "black market" for rentals. 
D)  An excess supply of rentals at the controlled price. 
A)  Discriminatory practices by landlords. 
B)  More time on waiting lists and searching for housing. 
C)  A "black market" for rentals. 
D)  An excess supply of rentals at the controlled price.

Question 6

Exhibit 4-6 Demand and supply curves
  
-If the market demand and supply curves shift as given in Exhibit 4-6,the resulting new equilibrium will show a(n):

Accepted Answer

A)  increase in market price and a decrease in the quantity exchanged. 
B)  decrease in market price and a decrease in the quantity exchanged. 
C)  increase in market price and an increase in the quantity exchanged. 
D)  decrease in market price and an increase in the quantity exchanged. 
E)  decrease in market price and no change in the quantity exchanged. 
A)  increase in market price and a decrease in the quantity exchanged. 
B)  decrease in market price and a decrease in the quantity exchanged. 
C)  increase in market price and an increase in the quantity exchanged. 
D)  decrease in market price and an increase in the quantity exchanged. 
E)  decrease in market price and no change in the quantity exchanged.

Question 7

Exhibit 4-4 Supply and demand curves for good X
  
-An increase in the price of a complementary good would be represented in which of the graphs in Exhibit 4-4?

Accepted Answer

A)  Graph A. 
B)  Graph B. 
C)  Graph C. 
D)  None of the above. 
A)  Graph A. 
B)  Graph B. 
C)  Graph C. 
D)  None of the above.

Question 8

Suppose a price floor is set by the government above the market equilibrium price.Which of the following will result?

Accepted Answer

A)  There will be a surplus. 
B)  The quantity demanded will exceed the quantity supplied. 
C)  The demand curve will shift to the left. 
D)  None of the above. 
A)  There will be a surplus. 
B)  The quantity demanded will exceed the quantity supplied. 
C)  The demand curve will shift to the left. 
D)  None of the above.

Question 9

Exhibit 4-3 Supply and demand curves
  
-In Exhibit 4-3,an increase in quantity supplied would cause a movement from which equilibrium point to another,other things being equal?

Accepted Answer

A)  E₁ to E₂. 
B)  E₁ to E₄. 
C)  E₄ to E₁. 
D)  E₃ to E₄. 
A)  E₁ to E₂. 
B)  E₁ to E₄. 
C)  E₄ to E₁. 
D)  E₃ to E₄.

Question 10

Each year around Valentine's Day,we would expect:

Accepted Answer

A)  the demand for roses to increase. 
B)  the price of roses to increase. 
C)  the quantity of roses sold to increase. 
D)  all of the above. 
A)  the demand for roses to increase. 
B)  the price of roses to increase. 
C)  the quantity of roses sold to increase. 
D)  all of the above.

An increase in demand and a decrease in supply cause which of the following?

Which of the following would be an external cost associated with the manufacture of cigarettes?

Exhibit 4-11 Data on supply and demand -Which of the following is not an example of market failure?

Exhibit 4-4 Supply and demand curves for good X -A decrease in buyers' income,assuming good X is a normal good,combined with a decrease in the wage rate paid to workers producing good X would be represented by which of the following changes in equilibrium shown in Graph C of Exhibit 4-4?

Which of the following is not a common effect of imposing a rent control?

Exhibit 4-6 Demand and supply curves -If the market demand and supply curves shift as given in Exhibit 4-6,the resulting new equilibrium will show a(n):

Exhibit 4-4 Supply and demand curves for good X -An increase in the price of a complementary good would be represented in which of the graphs in Exhibit 4-4?

Suppose a price floor is set by the government above the market equilibrium price.Which of the following will result?

Exhibit 4-3 Supply and demand curves -In Exhibit 4-3,an increase in quantity supplied would cause a movement from which equilibrium point to another,other things being equal?

Each year around Valentine's Day,we would expect:

Introducing the Economic Way of Thinking

A: Appendix: Applying Graphs to Economics

Production Possibilities,Opportunity Cost,and Economic Growth

Part 1: Market Demand and Supply

Part 2: Market Demand and Supply

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

A: Appendix: The Self-Correcting Aggregate Demand and Supply Model

Fiscal Policy

The Public Sector

Federal Deficits,Surpluses,and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

A: Appendix: Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Filters

Exam 4: Markets in Action

An increase in demand and a decrease in supply cause which of the following?

Which of the following would be an external cost associated with the manufacture of cigarettes?

Exhibit 4-11 Data on supply and demand -Which of the following is not an example of market failure?

Exhibit 4-4 Supply and demand curves for good X -A decrease in buyers' income,assuming good X is a normal good,combined with a decrease in the wage rate paid to workers producing good X would be represented by which of the following changes in equilibrium shown in Graph C of Exhibit 4-4?

Which of the following is not a common effect of imposing a rent control?

Exhibit 4-6 Demand and supply curves -If the market demand and supply curves shift as given in Exhibit 4-6,the resulting new equilibrium will show a(n):

Exhibit 4-4 Supply and demand curves for good X -An increase in the price of a complementary good would be represented in which of the graphs in Exhibit 4-4?

Suppose a price floor is set by the government above the market equilibrium price.Which of the following will result?

Exhibit 4-3 Supply and demand curves -In Exhibit 4-3,an increase in quantity supplied would cause a movement from which equilibrium point to another,other things being equal?

Each year around Valentine's Day,we would expect:

Introducing the Economic Way of Thinking

A: Appendix: Applying Graphs to Economics

Production Possibilities,Opportunity Cost,and Economic Growth

Part 1: Market Demand and Supply

Part 2: Market Demand and Supply

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Business Cycles and Unemployment

Inflation

Aggregate Demand and Supply

A: Appendix: The Self-Correcting Aggregate Demand and Supply Model

Fiscal Policy

The Public Sector

Federal Deficits,Surpluses,and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

A: Appendix: Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Filters