Question 1

Exhibit 4-3  
-Refer to Exhibit 4-3.If price P1 is a price ceiling,then

Accepted Answer

A) the quantity exchanged is Q3. 
B) there is a shortage in this market. 
C) it is the highest price that can legally be charged in this market. 
D) both b and c 
A) the quantity exchanged is Q3. 
B) there is a shortage in this market. 
C) it is the highest price that can legally be charged in this market. 
D) both b and c

Question 2

A price ceiling set below the equilibrium price will

Accepted Answer

A) clear the market for the good. 
B) result in a shortage of the good. 
C) result in a surplus of the good. 
D) induce new firms to enter the industry. 
A) clear the market for the good. 
B) result in a shortage of the good. 
C) result in a surplus of the good. 
D) induce new firms to enter the industry.

Question 3

The number of unskilled workers employed before and after a change in the minimum wage is found to be the same.This means

Accepted Answer

A) the minimum wage change did not affect the unskilled labor market. 
B) nothing,unless we also know that the number of hours worked by each worker has not changed. 
C) the minimum wage could be below the equilibrium wage for unskilled labor. 
D) either b or c 
E) none of the above 
A) the minimum wage change did not affect the unskilled labor market. 
B) nothing,unless we also know that the number of hours worked by each worker has not changed. 
C) the minimum wage could be below the equilibrium wage for unskilled labor. 
D) either b or c 
E) none of the above

Question 4

Exhibit 4-6  
-Refer to Exhibit 4-6.At a wage of $7,there will be a __________ of unskilled workers equal to __________ thousand workers.

Accepted Answer

A) shortage;10 
B) surplus;20 
C) surplus;10 
D) shortage;20 
E) surplus;15 
A) shortage;10 
B) surplus;20 
C) surplus;10 
D) shortage;20 
E) surplus;15

Question 5

Exhibit 4-8  
-Refer to Exhibit 4-8.Suppose that wheat producers lobby the government for a price floor and receive one.This price floor is set at PF.What is the size of the consumers' surplus at PF?

Accepted Answer

A) area 5 
B) area 6 
C) area 1 + 2 + 4 
D) area 1 
A) area 5 
B) area 6 
C) area 1 + 2 + 4 
D) area 1

Question 6

Price serves as a

Accepted Answer

A) rationing device. 
B) transmitter of information. 
C) means of determining who gets what of the available limited resources and goods. 
D) a and b 
E) all of the above 
A) rationing device. 
B) transmitter of information. 
C) means of determining who gets what of the available limited resources and goods. 
D) a and b 
E) all of the above

Question 7

Exhibit 4-3  
-Refer to Exhibit 4-3.If price P2 is a price ceiling,then

Accepted Answer

A) there is a shortage in the market for good X. 
B) the highest price that can legally be charged in this market is P3. 
C) the price at which exchange legally takes place in the market for good X is P2. 
D) the quantity exchanged is less than the quantity demanded. 
E) all of the above 
A) there is a shortage in the market for good X. 
B) the highest price that can legally be charged in this market is P3. 
C) the price at which exchange legally takes place in the market for good X is P2. 
D) the quantity exchanged is less than the quantity demanded. 
E) all of the above

Question 8

A shortage of kidneys (for transplants)results from

Accepted Answer

A) the legal price being set below the equilibrium price. 
B) the legal price being set above the equilibrium price. 
C) a price floor being set in the kidney market at P = $0,assuming the equilibrium price is greater than $0. 
D) a price ceiling being set in the kidney market at P = $0,assuming the equilibrium price is greater than $0. 
E) a and d 
A) the legal price being set below the equilibrium price. 
B) the legal price being set above the equilibrium price. 
C) a price floor being set in the kidney market at P = $0,assuming the equilibrium price is greater than $0. 
D) a price ceiling being set in the kidney market at P = $0,assuming the equilibrium price is greater than $0. 
E) a and d

Question 9

Which of the following statements is true?

Accepted Answer

A) Price ceilings set below the equilibrium price cause shortages. 
B) Surpluses result when a price floor is set above the equilibrium price. 
C) Price ceililngs set above the equilibrium price cause surpluses. 
D) Price ceilings are set by the market and price floors are set by the government. 
E) ​a and b 
A) Price ceilings set below the equilibrium price cause shortages. 
B) Surpluses result when a price floor is set above the equilibrium price. 
C) Price ceililngs set above the equilibrium price cause surpluses. 
D) Price ceilings are set by the market and price floors are set by the government. 
E) ​a and b

Question 10

If the absolute price of a computer is $500 and the relative price of a dining room table is 3 computers,it follows that the absolute price of a dining room table is

Accepted Answer

A) $167. 
B) $750. 
C) $3,000. 
D) $30,000. 
E) none of the above 
A) $167. 
B) $750. 
C) $3,000. 
D) $30,000. 
E) none of the above

Question 11

Exhibit 4-8  
-Refer to Exhibit 4-8.If the wheat market is in competitive equilibrium,the consumers' surplus will equal

Accepted Answer

A) area 1 + 2 + 3 
B) area 1 + 2 + 4 
C) area 3 + 5 
D) area 1 + 2 + 3 + 4 + 5 
E) area 6 
A) area 1 + 2 + 3 
B) area 1 + 2 + 4 
C) area 3 + 5 
D) area 1 + 2 + 3 + 4 + 5 
E) area 6

Question 12

Exhibit 4-2  
-Exhibit 4-2 represents the orange juice market.The horizontal line represents a price ceiling imposed by the government.Which of the following is true?

Accepted Answer

A) At equilibrium,the quantity demanded is 700 units. 
B) At the price ceiling,there is a surplus of orange juice. 
C) The quantity supplied at the price ceiling will equal the quantity exchanged. 
D) The quantity demanded at the price ceiling will equal the quantity supplied. 
E) The quantity demanded at the price ceiling will equal the quantity exchanged. 
A) At equilibrium,the quantity demanded is 700 units. 
B) At the price ceiling,there is a surplus of orange juice. 
C) The quantity supplied at the price ceiling will equal the quantity exchanged. 
D) The quantity demanded at the price ceiling will equal the quantity supplied. 
E) The quantity demanded at the price ceiling will equal the quantity exchanged.

Question 13

If the price of good X is $100 and the price of good Y is $40,it follows that the relative price of one unit of good Y is ___________ unit(s)of good X.

Accepted Answer

A) 0.40 
B) 0.20 
C) 2.50 
D) 4.00 
E) There is not enough information to answer the question. 
A) 0.40 
B) 0.20 
C) 2.50 
D) 4.00 
E) There is not enough information to answer the question.

Question 14

There is currently a price ceiling in the market for transplanted kidneys,which has helped to create a shortage of transplanted kidneys.

Accepted Answer

A) True 
 B)False

Question 15

Exhibit 4-8  
-Refer to Exhibit 4-8.Suppose that wheat producers lobby the government for a price floor and receive one.This price floor is set at PF.What is the quantity of wheat purchased at PF?

Accepted Answer

A) Q1 
B) Q2 
C) Q3 
D) Q2 - Q1 
A) Q1 
B) Q2 
C) Q3 
D) Q2 - Q1

Exam 4: Prices: Free, controlled, and Relative

Exhibit 4-3 -Refer to Exhibit 4-3.If price P1 is a price ceiling,then

A price ceiling set below the equilibrium price will

The number of unskilled workers employed before and after a change in the minimum wage is found to be the same.This means

Exhibit 4-6 -Refer to Exhibit 4-6.At a wage of $7,there will be a __________ of unskilled workers equal to __________ thousand workers.

Exhibit 4-8 -Refer to Exhibit 4-8.Suppose that wheat producers lobby the government for a price floor and receive one.This price floor is set at PF.What is the size of the consumers' surplus at PF?

Price serves as a

Exhibit 4-3 -Refer to Exhibit 4-3.If price P2 is a price ceiling,then

A shortage of kidneys (for transplants)results from

Which of the following statements is true?

If the absolute price of a computer is $500 and the relative price of a dining room table is 3 computers,it follows that the absolute price of a dining room table is

Exhibit 4-8 -Refer to Exhibit 4-8.If the wheat market is in competitive equilibrium,the consumers' surplus will equal

Exhibit 4-2 -Exhibit 4-2 represents the orange juice market.The horizontal line represents a price ceiling imposed by the government.Which of the following is true?

If the price of good X is $100 and the price of good Y is $40,it follows that the relative price of one unit of good Y is ___________ unit(s)of good X.

There is currently a price ceiling in the market for transplanted kidneys,which has helped to create a shortage of transplanted kidneys.

Exhibit 4-8 -Refer to Exhibit 4-8.Suppose that wheat producers lobby the government for a price floor and receive one.This price floor is set at PF.What is the quantity of wheat purchased at PF?

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Supply,demand,and Price: Applications

Macroeconomic Measurements, part I: Prices and Unemployment

Macroeconomic Measurements, part II: GDP and Real GDP

Aggregate Demand and Aggregate Supply

Classical Macroeconomics and the Self-Regulating Economy

Keynesian Macroeconomics and Economic Instability: a Critique of the Self-Regulating Economy

Fiscal Policy and the Federal Budget

Money,banking,and the Financial System

The Federal Reserve System

Money and the Economy

Monetary Policy

Expectations Theory and the Economy

Economic Growth: Resources, technology, ideas, and Institutions

The Financial Crisis of 2007-2009

Debates in Macroeconomics Over the Role and Effects of Government

Public Choice and Special-Interest-Group Politics

Building Theories to Explain Everyday Life: From Observations to Questions to Theories to Predictions

International Trade

International Finance

Globalization and International Impacts on the Economy

The Economic Case for and Against Government: Five Topics Considered

Stocks, bonds, futures, and Options

Filters

Exhibit 4-3 -Refer to Exhibit 4-3.If price P₁ is a price ceiling,then

Exhibit 4-6 -Refer to Exhibit 4-6.At a wage of $7,there will be a of unskilled workers equal to thousand workers.

Exhibit 4-8 -Refer to Exhibit 4-8.Suppose that wheat producers lobby the government for a price floor and receive one.This price floor is set at P_F.What is the size of the consumers' surplus at P_F?

Exhibit 4-3 -Refer to Exhibit 4-3.If price P₂ is a price ceiling,then

Exhibit 4-8 -Refer to Exhibit 4-8.Suppose that wheat producers lobby the government for a price floor and receive one.This price floor is set at P_F.What is the quantity of wheat purchased at P_F?