Question 1

When the government _____________ mortgage lending standards,the indirect result is likely to be _____________ home prices.

Accepted Answer

A) lowers;higher 
B) increases;lower 
C) lowers;lower 
D) increases;higher 
E) a and b 
A) lowers;higher 
B) increases;lower 
C) lowers;lower 
D) increases;higher 
E) a and b E

Question 2

Suppose that a television studio has two shows,X and Z,and that tickets for viewing the taping of each show is free.The equilibrium price for a ticket to view the taping of show X is $25 and the equilibrium price for a ticket to view the taping of show B is -$20.It is likely that tickets to show ________ will need to be rationed on a first-come-first-served basis,while the producers of show ________ will have a much more difficult time filling the seats in the studio since the equilibrium price for tickets to that show is a __________ dollar amount.

Accepted Answer

A) Z;X;positive 
B) Z;X;negative 
C) X;Z;positive 
D) X;Z;negative 
A) Z;X;positive 
B) Z;X;negative 
C) X;Z;positive 
D) X;Z;negative D

Question 3

Exhibit 5-5  
-Refer to Exhibit 5-5.If the airline charges a price that is between P1 and P2 for both aisle seats and middle seats,the result will be

Accepted Answer

A) a surplus of middle seats and a shortage of aisle seats. 
B) a surplus of aisle seats and a shortage of middle seats. 
C) a shortage of middle seats and the equilibrium quantity of aisle seats. 
D) a shortage of aisle seats and the equilibrium quantity of middle seats. 
A) a surplus of middle seats and a shortage of aisle seats. 
B) a surplus of aisle seats and a shortage of middle seats. 
C) a shortage of middle seats and the equilibrium quantity of aisle seats. 
D) a shortage of aisle seats and the equilibrium quantity of middle seats. A

Question 4

Exhibit 5-4  
-Refer to Exhibit 5-4.If television studio executives choose to charge a price of PB to view the taping of all shows,they will find that there is a shortage of tickets to view the taping of show ___________ and a surplus of tickets to view the taping of show ______________.

Accepted Answer

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

Question 5

Good weather in cities such as San Diego

Accepted Answer

A) is absolutely free for the residents of that city. 
B) is allocated using a weather market. 
C) imposes indirect payments for the residents of that city. 
D) b and c 
E) none of the above 
A) is absolutely free for the residents of that city. 
B) is allocated using a weather market. 
C) imposes indirect payments for the residents of that city. 
D) b and c 
E) none of the above

Question 6

In a given community,if the government builds more freeways,then the supply curve for freeway space shifts rightward and the demand curve for freeway space shifts leftward.

Accepted Answer

A) True 
 B)False

Question 7

If patients were allowed to sue their HMO,we would expect

Accepted Answer

A) the demand curve for health care services provided by the HMO to shift to the left and the price of HMO-provided health care coverage to fall. 
B) the supply curve for health care services provided by the HMO to shift to the left and the price of HMO-provided health care coverage to rise. 
C) the supply curve for health care services provided by the HMO to shift to the right and the price of HMO-provided health care coverage to fall. 
D) a and b 
E) none of the above 
A) the demand curve for health care services provided by the HMO to shift to the left and the price of HMO-provided health care coverage to fall. 
B) the supply curve for health care services provided by the HMO to shift to the left and the price of HMO-provided health care coverage to rise. 
C) the supply curve for health care services provided by the HMO to shift to the right and the price of HMO-provided health care coverage to fall. 
D) a and b 
E) none of the above

Question 8

The supply curve for space on a freeway is perfectly vertical at any given point in time.

Accepted Answer

A) True 
 B)False

Question 9

Residents of cities with a reputation for good weather,ceteris paribus,

Accepted Answer

A) pay a higher price for housing because the demand for housing is higher. 
B) pay a higher price for housing because the supply of housing is higher. 
C) pay a higher price for housing because the supply and demand for housing is higher. 
D) pay the same for housing as they would in cities with a reputation for bad weather. 
A) pay a higher price for housing because the demand for housing is higher. 
B) pay a higher price for housing because the supply of housing is higher. 
C) pay a higher price for housing because the supply and demand for housing is higher. 
D) pay the same for housing as they would in cities with a reputation for bad weather.

Question 10

As discussed in the textbook,describe some policy changes the government could make in order to make it easier for people to buy houses.Using supply and demand analysis,explain how these policy changes could indirectly lead to fewer people being able to afford to purchase a home.

Accepted Answer

In order to encourage home ownership,the

Question 11

People who buy houses in good-weather locations receive this benefit absolutely for free.

Accepted Answer

A) True 
 B)False

Question 12

The space on the freeway is fixed at any instant of time.A supply curve that shows this is

Accepted Answer

A) perfectly horizontal. 
B) upward sloping. 
C) downward sloping. 
D) perfectly vertical. 
A) perfectly horizontal. 
B) upward sloping. 
C) downward sloping. 
D) perfectly vertical.

Question 13

Exhibit 5-5  
-Refer to Exhibit 5-5.If the airline charges price P1 for both aisle seats and middle seats,the result will be

Accepted Answer

A) a surplus of middle seats and the equilibrium quantity of aisle seats. 
B) a surplus of aisle seats and the equilibrium quantity of middle seats. 
C) a shortage of middle seats and the equilibrium quantity of aisle seats. 
D) a shortage of aisle seats and the equilibrium quantity of middle seats. 
A) a surplus of middle seats and the equilibrium quantity of aisle seats. 
B) a surplus of aisle seats and the equilibrium quantity of middle seats. 
C) a shortage of middle seats and the equilibrium quantity of aisle seats. 
D) a shortage of aisle seats and the equilibrium quantity of middle seats.

Question 14

The existence of a third party in the medical care market separates the buying of medical care from the paying for medical care.

Accepted Answer

A) True 
 B)False

Question 15

Exhibit 5-6  
-The lower the price of medical care in general,the higher the ____________________________ medical care and the ______________________ specific items that make up medical care (such as x-rays).The result will be a _______________ price for the specific items that make up medical care.

Accepted Answer

A) quantity demanded of;higher the demand for;higher 
B) demand for;higher the demand for;higher 
C) quantity demanded of;lower the demand for;lower 
D) demand for;higher the quantity demanded of;higher 
A) quantity demanded of;higher the demand for;higher 
B) demand for;higher the demand for;higher 
C) quantity demanded of;lower the demand for;lower 
D) demand for;higher the quantity demanded of;higher

Question 16

High demand for a product does not necessarily mean a high quantity demanded for that product if the price is high enough.

Accepted Answer

A) True 
 B)False

Question 17

Explain in detail how the legalization of marijuana would be expected to impact the supply,demand,equilibrium price and quantity for marijuana.

Accepted Answer

Legalization of any currently illegal dr

Question 18

Which of the following statements is false?

Accepted Answer

A) If Mexican restaurant owners provide free chips and salsa to their customers,the quantity demanded of chips and salsa will be greater than if customers had to pay for them. 
B) If the price of a good falls,then the demand for its complements will increase. 
C) If the price of a good rises,then the price of its complements will rise. 
D) If chips and salsa are offered for free to Mexican restaurant customers,then restaurants can charge a higher price for products that are complements to chips and salsa (such as beer). 
A) If Mexican restaurant owners provide free chips and salsa to their customers,the quantity demanded of chips and salsa will be greater than if customers had to pay for them. 
B) If the price of a good falls,then the demand for its complements will increase. 
C) If the price of a good rises,then the price of its complements will rise. 
D) If chips and salsa are offered for free to Mexican restaurant customers,then restaurants can charge a higher price for products that are complements to chips and salsa (such as beer).

Question 19

The objective of speculators is to buy at one price and sell at a lower price.

Accepted Answer

A) True 
 B)False

Question 20

If the supply of aisle seats and middle seats on an airplane is the same,but the demand for aisle seats is greater than the demand for middle seats,then the equilibrium price of aisle seats will be less than the equilibrium price of middle seats.

Accepted Answer

A) True 
 B)False

Exam 5: Supply,demand,and Price: Applications

When the government _____________ mortgage lending standards,the indirect result is likely to be _____________ home prices.

Exhibit 5-5 -Refer to Exhibit 5-5.If the airline charges a price that is between P1 and P2 for both aisle seats and middle seats,the result will be

Exhibit 5-4 -Refer to Exhibit 5-4.If television studio executives choose to charge a price of PB to view the taping of all shows,they will find that there is a shortage of tickets to view the taping of show ___________ and a surplus of tickets to view the taping of show ______________.

Good weather in cities such as San Diego

In a given community,if the government builds more freeways,then the supply curve for freeway space shifts rightward and the demand curve for freeway space shifts leftward.

If patients were allowed to sue their HMO,we would expect

The supply curve for space on a freeway is perfectly vertical at any given point in time.

Residents of cities with a reputation for good weather,ceteris paribus,

As discussed in the textbook,describe some policy changes the government could make in order to make it easier for people to buy houses.Using supply and demand analysis,explain how these policy changes could indirectly lead to fewer people being able to afford to purchase a home.

People who buy houses in good-weather locations receive this benefit absolutely for free.

The space on the freeway is fixed at any instant of time.A supply curve that shows this is

Exhibit 5-5 -Refer to Exhibit 5-5.If the airline charges price P1 for both aisle seats and middle seats,the result will be

The existence of a third party in the medical care market separates the buying of medical care from the paying for medical care.

Exhibit 5-6 -The lower the price of medical care in general,the higher the ____________________________ medical care and the ______________________ specific items that make up medical care (such as x-rays).The result will be a _______________ price for the specific items that make up medical care.

High demand for a product does not necessarily mean a high quantity demanded for that product if the price is high enough.

Explain in detail how the legalization of marijuana would be expected to impact the supply,demand,equilibrium price and quantity for marijuana.

Which of the following statements is false?

The objective of speculators is to buy at one price and sell at a lower price.

If the supply of aisle seats and middle seats on an airplane is the same,but the demand for aisle seats is greater than the demand for middle seats,then the equilibrium price of aisle seats will be less than the equilibrium price of middle seats.

What Economics Is About

Production Possibilities Frontier Framework

Supply and Demand: Theory

Prices: Free, controlled, and Relative

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

When the government _ mortgage lending standards,the indirect result is likely to be _ home prices.

Exhibit 5-5 -Refer to Exhibit 5-5.If the airline charges a price that is between P₁ and P₂ for both aisle seats and middle seats,the result will be

Exhibit 5-4 -Refer to Exhibit 5-4.If television studio executives choose to charge a price of P_B to view the taping of all shows,they will find that there is a shortage of tickets to view the taping of show _ and a surplus of tickets to view the taping of show ____.

Exhibit 5-5 -Refer to Exhibit 5-5.If the airline charges price P₁ for both aisle seats and middle seats,the result will be

Exhibit 5-6 -The lower the price of medical care in general,the higher the ____________ medical care and the specific items that make up medical care (such as x-rays).The result will be a _ price for the specific items that make up medical care.