Question 1

If both the supply and demand for computer games increase,then the equilibrium price of the games:

Accepted Answer

A)  is indeterminate and the equilibrium quantity rises. 
B)  is indeterminate and the equilibrium quantity falls. 
C)  falls and the equilibrium quantity also falls. 
D)  falls and the change in equilibrium quantity is indeterminate. 
A)  is indeterminate and the equilibrium quantity rises. 
B)  is indeterminate and the equilibrium quantity falls. 
C)  falls and the equilibrium quantity also falls. 
D)  falls and the change in equilibrium quantity is indeterminate. A

Question 2

A surplus exists in the market for Barbie dolls at the prevailing price.The surplus will be eliminated by a price:

Accepted Answer

A)  increase, decreasing the supply and increasing the demand. 
B)  decrease, decreasing the supply and increasing the demand. 
C)  decrease, increasing the quantity supplied and increasing the quantity demanded. 
D)  decrease, decreasing the quantity supplied and increasing the quantity demanded. 
A)  increase, decreasing the supply and increasing the demand. 
B)  decrease, decreasing the supply and increasing the demand. 
C)  decrease, increasing the quantity supplied and increasing the quantity demanded. 
D)  decrease, decreasing the quantity supplied and increasing the quantity demanded. D

Question 3

A leftward shift of the demand curve results in:

Accepted Answer

A)  increase in equilibrium price. 
B)  increase in quantity. 
C)  decrease in both equilibrium price and quantity. 
D)  decrease in quantity and an indeterminate equilibrium price. 
A)  increase in equilibrium price. 
B)  increase in quantity. 
C)  decrease in both equilibrium price and quantity. 
D)  decrease in quantity and an indeterminate equilibrium price. C

Question 4

An increase in the price of a good could be caused by

Accepted Answer

A)  An increase in supply. 
B)  An increase in demand. 
C)  A decrease in supply and an increase in demand. 
D)  Either b. or c. 
A)  An increase in supply. 
B)  An increase in demand. 
C)  A decrease in supply and an increase in demand. 
D)  Either b. or c.

Question 5

A binding price ceiling causes a shortage in the market.

Accepted Answer

A) True 
 B)False

Question 6

Either a price floor or a price ceiling above the equilibrium price would cause a surplus.

Accepted Answer

A) True 
 B)False

Question 7

If both buyers and sellers of a good expect its price to fall in the near future,we would expect that to cause the current price and the quantity traded to increase as a result.

Accepted Answer

A) True 
 B)False

Question 8

Minimum wage laws have little or no effect in this segment.

Accepted Answer

A)  Low-skilled Labor 
B)  Teenagers 
C)  Skilled workers 
D)  Unemployed workers 
A)  Low-skilled Labor 
B)  Teenagers 
C)  Skilled workers 
D)  Unemployed workers

Question 9

The major drawback of a price ceiling is:

Accepted Answer

A)  it causes a surplus. 
B)  government regulations of this kind are difficult to enforce. 
C)  it causes a shortage. 
D)  none of the above; there is no drawback. 
A)  it causes a surplus. 
B)  government regulations of this kind are difficult to enforce. 
C)  it causes a shortage. 
D)  none of the above; there is no drawback.

Question 10

When a binding price ceiling is imposed on a market,

Accepted Answer

A)  price no longer serves as a rationing device. 
B)  the quantity supplied at the price ceiling exceeds the quantity that would have been supplied without the price ceiling. 
C)  all buyers benefit. 
D)  All of the above are correct. 
A)  price no longer serves as a rationing device. 
B)  the quantity supplied at the price ceiling exceeds the quantity that would have been supplied without the price ceiling. 
C)  all buyers benefit. 
D)  All of the above are correct.

Question 11

When supply shifts to the left,it would make the surplus from a price floor smaller,other things equal.

Accepted Answer

A) True 
 B)False

Question 12

Exhibit 5-4   Refer to Exhibit 5-4.Starting with initial demand curves D0 and S0,a movement from ____ is consistent with an increase in both demand and supply.

Accepted Answer

A)  Point A to Point I 
B)  Point A to Point C 
C)  Point A to Point F 
D)  Point A to Point E 
A)  Point A to Point I 
B)  Point A to Point C 
C)  Point A to Point F 
D)  Point A to Point E

Question 13

A decrease in the current minimum wage would:

Accepted Answer

A)  decrease employment for low skill workers. 
B)  increase firm's demand curves for low skill workers. 
C)  increase the supply of low skill workers. 
D)  decrease the incomes of some low skill workers. 
A)  decrease employment for low skill workers. 
B)  increase firm's demand curves for low skill workers. 
C)  increase the supply of low skill workers. 
D)  decrease the incomes of some low skill workers.

Question 14

If the government removes a binding price floor from a market,then the price received by sellers will

Accepted Answer

A)  decrease, and the quantity sold in the market will decrease. 
B)  decrease, and the quantity sold in the market will increase. 
C)  increase, and the quantity sold in the market will decrease. 
D)  increase, and the quantity sold in the market will increase. 
A)  decrease, and the quantity sold in the market will decrease. 
B)  decrease, and the quantity sold in the market will increase. 
C)  increase, and the quantity sold in the market will decrease. 
D)  increase, and the quantity sold in the market will increase.

Question 15

If a price floor is a binding constraint on a market,then

Accepted Answer

A)  the equilibrium price must be above the price floor. 
B)  the quantity demanded must exceed the quantity supplied. 
C)  sellers cannot sell all they want to sell at the price floor. 
D)  buyers cannot buy all they want to buy at the price floor. 
A)  the equilibrium price must be above the price floor. 
B)  the quantity demanded must exceed the quantity supplied. 
C)  sellers cannot sell all they want to sell at the price floor. 
D)  buyers cannot buy all they want to buy at the price floor.

Question 16

Nick is delighted to see that the price of his favorite food,black olives,has fallen.Which of the following could be responsible?

Accepted Answer

A)  an increase in the demand for black olives 
B)  a decrease in the supply of black olives 
C)  a simultaneous increase in demand and decrease in supply of black olives 
D)  a simultaneous decrease in demand and increase in supply of black olives 
A)  an increase in the demand for black olives 
B)  a decrease in the supply of black olives 
C)  a simultaneous increase in demand and decrease in supply of black olives 
D)  a simultaneous decrease in demand and increase in supply of black olives

Question 17

A flood damages many homes and farms in the Midwest.Shortly thereafter,the price of plywood rises significantly.The events suggest that:

Accepted Answer

A)  a decrease in the supply of plywood caused the price of plywood to rise. 
B)  an increase in the supply of plywood caused the price of plywood to rise. 
C)  a decrease in the demand for plywood caused the price of plywood to rise. 
D)  an increase in the demand for plywood caused the price of plywood to rise. 
A)  a decrease in the supply of plywood caused the price of plywood to rise. 
B)  an increase in the supply of plywood caused the price of plywood to rise. 
C)  a decrease in the demand for plywood caused the price of plywood to rise. 
D)  an increase in the demand for plywood caused the price of plywood to rise.

Question 18

Exhibit 5-3 Use the following information about demand and supply schedules to answer the question.
  Refer to Exhibit 5-3.Suppose that D1 and S2 are the demand and supply schedules for Product A.If the government imposes a price ceiling of $10:

Accepted Answer

A)  a shortage of 4 units will result. 
B)  a surplus of 4 units will result. 
C)  a surplus of 10 units will result. 
D)  the ceiling will have no impact on the quantity of Product A traded. 
A)  a shortage of 4 units will result. 
B)  a surplus of 4 units will result. 
C)  a surplus of 10 units will result. 
D)  the ceiling will have no impact on the quantity of Product A traded.

Question 19

Exhibit 5-4   Refer to Exhibit 5-4.Starting with initial demand curves D0 and S0,a movement from ____ is consistent with a decrease in both demand and supply.

Accepted Answer

A)  Point A to Point I 
B)  Point A to Point C 
C)  Point A to Point F 
D)  Point A to Point E 
A)  Point A to Point I 
B)  Point A to Point C 
C)  Point A to Point F 
D)  Point A to Point E

Question 20

A price ceiling set below the equilibrium price causes a shortage in the market.

Accepted Answer

A) True 
 B)False

Exam 5: Markets in Motion and Price Controls

If both the supply and demand for computer games increase,then the equilibrium price of the games:

A surplus exists in the market for Barbie dolls at the prevailing price.The surplus will be eliminated by a price:

A leftward shift of the demand curve results in:

An increase in the price of a good could be caused by

A binding price ceiling causes a shortage in the market.

Either a price floor or a price ceiling above the equilibrium price would cause a surplus.

If both buyers and sellers of a good expect its price to fall in the near future,we would expect that to cause the current price and the quantity traded to increase as a result.

Minimum wage laws have little or no effect in this segment.

The major drawback of a price ceiling is:

When a binding price ceiling is imposed on a market,

When supply shifts to the left,it would make the surplus from a price floor smaller,other things equal.

Exhibit 5-4 Refer to Exhibit 5-4.Starting with initial demand curves D0 and S0,a movement from ____ is consistent with an increase in both demand and supply.

A decrease in the current minimum wage would:

If the government removes a binding price floor from a market,then the price received by sellers will

If a price floor is a binding constraint on a market,then

Nick is delighted to see that the price of his favorite food,black olives,has fallen.Which of the following could be responsible?

A flood damages many homes and farms in the Midwest.Shortly thereafter,the price of plywood rises significantly.The events suggest that:

Exhibit 5-3 Use the following information about demand and supply schedules to answer the question. Refer to Exhibit 5-3.Suppose that D1 and S2 are the demand and supply schedules for Product A.If the government imposes a price ceiling of $10:

Exhibit 5-4 Refer to Exhibit 5-4.Starting with initial demand curves D0 and S0,a movement from ____ is consistent with a decrease in both demand and supply.

A price ceiling set below the equilibrium price causes a shortage in the market.

The Role and Method of Economics

Economics: Eight Powerful Ideas

Scarcity, Trade-Offs, and Production Possibilities

Demand, Supply, and Market Equilibrium

Elasticities

Market Efficiency and Welfare

Market Failure

Public Finance and Public Choice

Consumer Choice Theory

The Firm: Production and Costs

Firms in Perfectly Competitive Markets

Monopoly and Antitrust

Monopolistic Competition and Product Differentiation

Oligopoly and Strategic Behavior

The Markets for Labor, Capital, and Land

Income, Poverty, and Health Care

Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations

Measuring Economic Performance

Economic Growth in the Global Economy

Financial Markets, Saving, and Investment

Aggregate Demand and Aggregate Supply

The Aggregate Expenditure Model

Monetary Institutions

The Federal Reserve System and Monetary Policy

Issues in Macroeconomic Theory and Policy

International Trade

International Finance

Filters

Exhibit 5-4 Refer to Exhibit 5-4.Starting with initial demand curves D₀ and S₀,a movement from ____ is consistent with an increase in both demand and supply.

Exhibit 5-3 Use the following information about demand and supply schedules to answer the question. Refer to Exhibit 5-3.Suppose that D₁ and S₂ are the demand and supply schedules for Product A.If the government imposes a price ceiling of $10:

Exhibit 5-4 Refer to Exhibit 5-4.Starting with initial demand curves D₀ and S₀,a movement from ____ is consistent with a decrease in both demand and supply.