Question 1

Britain and Canada impose strict limits on reimbursements to hospitals and physicians as part of their universal "free" health care.This is a form of a:

Accepted Answer

A) price floor leading to lengthy delays before receiving treatment. 
B) price ceiling leading to lengthy delays before receiving treatment. 
C) price floor leading to shorter waiting times. 
D) price ceiling leading to shorter waiting times. 
A) price floor leading to lengthy delays before receiving treatment. 
B) price ceiling leading to lengthy delays before receiving treatment. 
C) price floor leading to shorter waiting times. 
D) price ceiling leading to shorter waiting times.

Question 2

Which one of the following is not a factor in the elasticity of demand for a good or service?

Accepted Answer

A) The length of time the price change is in effect 
B) The substitutes available for the good or service 
C) The percentage of one's budget the item consumes 
D) The cost of producing the good or service 
A) The length of time the price change is in effect 
B) The substitutes available for the good or service 
C) The percentage of one's budget the item consumes 
D) The cost of producing the good or service

Question 3

Along a linear demand curve,the price elasticity:

Accepted Answer

A) is constant. 
B) increases as price falls. 
C) is equal to one at the midpoint. 
D) decreases as the price level rises. 
A) is constant. 
B) increases as price falls. 
C) is equal to one at the midpoint. 
D) decreases as the price level rises.

Question 4

Which of the following is an example of price ceiling?

Accepted Answer

A) A payment made by the government to farmers to prevent them from planting certain crops 
B) Purchase of certain food crops by the government to lower its supply and increase its price 
C) A cap on the automobile insurance rate charged in some states 
D) A minimum wage announced by the government for workers in some specific industries 
A) A payment made by the government to farmers to prevent them from planting certain crops 
B) Purchase of certain food crops by the government to lower its supply and increase its price 
C) A cap on the automobile insurance rate charged in some states 
D) A minimum wage announced by the government for workers in some specific industries

Question 5

Suppose 100 pretzels are demanded at a given price.If the price of pretzels rises by 5% and the number of pretzels demanded falls to 92,it can be concluded that:.

Accepted Answer

A) the demand for pretzels in the price range is elastic. 
B) the demand for pretzels in the price range is inelastic. 
C) the demand for pretzels in the price range is unit elastic. 
D) the price elasticity of demand for pretzels is zero. 
A) the demand for pretzels in the price range is elastic. 
B) the demand for pretzels in the price range is inelastic. 
C) the demand for pretzels in the price range is unit elastic. 
D) the price elasticity of demand for pretzels is zero.

Question 6

Consider the demand curve Q = 3P-1/2 ,when P =10 elasticity is:

Accepted Answer

A) 0.5 
B) 1.5. 
C) 3. 
D) 6. 
A) 0.5 
B) 1.5. 
C) 3. 
D) 6.

Question 7

Along a linear demand curve,the price elasticity:

Accepted Answer

A) is constant. 
B) increases as price falls. 
C) is equal to zero at the midpoint. 
D) increases as the price level rises. 
A) is constant. 
B) increases as price falls. 
C) is equal to zero at the midpoint. 
D) increases as the price level rises.

Question 8

If a price ceiling is imposed and the quantity demanded exceeds the quantity supplied,which of the following is not likely to occur?

Accepted Answer

A) Nonprice rationing 
B) Black markets 
C) Increased production 
D) Quality deterioration 
A) Nonprice rationing 
B) Black markets 
C) Increased production 
D) Quality deterioration

Question 9

The demand curve for water is downward sloping,indicating that:

Accepted Answer

A) there are an increasing number of reservoirs. 
B) more consumers enter the market as the price falls. 
C) there is more consumption per person at lower prices. 
D) the production costs for water are very low. 
A) there are an increasing number of reservoirs. 
B) more consumers enter the market as the price falls. 
C) there is more consumption per person at lower prices. 
D) the production costs for water are very low.

Question 10

For which one of the following commodities is the demand curve likely to be most elastic?

Accepted Answer

A) Cigarettes 
B) Iams Dog food 
C) Milk 
D) Automobiles 
A) Cigarettes 
B) Iams Dog food 
C) Milk 
D) Automobiles

Question 11

The equilibrium price of houses in the San Francisco Bay Area has risen dramatically in recent years because:

Accepted Answer

A) there has been an enormous increase in demand. 
B) there has been an enormous increase in supply. 
C) there has been an enormous increase in quantity demanded. 
D) there has been an enormous increase in quantity supplied. 
A) there has been an enormous increase in demand. 
B) there has been an enormous increase in supply. 
C) there has been an enormous increase in quantity demanded. 
D) there has been an enormous increase in quantity supplied.

Question 12

When the demand for a commodity decreases and its supply is vertical we can conclude that:

Accepted Answer

A) both price and quantity will rise. 
B) price will fall while quantity remains constant. 
C) quantity will rise while price remains constant. 
D) neither price nor quantity will change. 
A) both price and quantity will rise. 
B) price will fall while quantity remains constant. 
C) quantity will rise while price remains constant. 
D) neither price nor quantity will change.

Question 13

An excess supply for a product indicates that the price is:

Accepted Answer

A) below the equilibrium price. 
B) above the equilibrium price. 
C) equal to the unit cost of production. 
D) exactly at the choke price. 
A) below the equilibrium price. 
B) above the equilibrium price. 
C) equal to the unit cost of production. 
D) exactly at the choke price.

Question 14

Explain how a change in price affects total expenditure by filling in each cell with the resulting change in total expenditure.

Accepted Answer

The answer of Explain how a change in price affects...

Question 15

A shift in the consumer's demand for a good X cannot result from a change in the:

Accepted Answer

A) price of a substitute for good X. 
B) price of X. 
C) consumer's taste. 
D) consumer's income. 
A) price of a substitute for good X. 
B) price of X. 
C) consumer's taste. 
D) consumer's income.

Question 16

When there is an excess supply of a good,there is a(n):

Accepted Answer

A) downward pressure on price because firms hold out for the best price they can get. 
B) downward pressure on price because firms accumulate unwanted inventories. 
C) upward pressure on price because firms hold out for the best price they can get. 
D) upward pressure on price because firms accumulate unwanted inventories. 
A) downward pressure on price because firms hold out for the best price they can get. 
B) downward pressure on price because firms accumulate unwanted inventories. 
C) upward pressure on price because firms hold out for the best price they can get. 
D) upward pressure on price because firms accumulate unwanted inventories.

Question 17

Which of the following market outcomes can be explained by the supply-demand model?

Accepted Answer

A) An increase in the demand for cigarettes after an increase in its price 
B) A decrease in household consumption following an increase in average monthly income 
C) An increase in supply in spite of a decline in input prices 
D) An increase in the per capita consumption of medical care in a country due to an epidemic 
A) An increase in the demand for cigarettes after an increase in its price 
B) A decrease in household consumption following an increase in average monthly income 
C) An increase in supply in spite of a decline in input prices 
D) An increase in the per capita consumption of medical care in a country due to an epidemic

Question 18

An increase in supply occurs when:

Accepted Answer

A) there is technological advance. 
B) the costs of production rise. 
C) the price of the good increases. 
D) the price of the good falls. 
A) there is technological advance. 
B) the costs of production rise. 
C) the price of the good increases. 
D) the price of the good falls.

Question 19

Which of the following statements about demand elasticity is correct?

Accepted Answer

A) If demand is price-inelastic,an increase in price will reduce total expenditures. 
B) If demand is price-elastic,an increase in price will increase total expenditures. 
C) If demand is price-inelastic,an increase in price will increase total expenditures. 
D) If demand is price-elastic,an increase in price will leave total expenditure unchanged. 
A) If demand is price-inelastic,an increase in price will reduce total expenditures. 
B) If demand is price-elastic,an increase in price will increase total expenditures. 
C) If demand is price-inelastic,an increase in price will increase total expenditures. 
D) If demand is price-elastic,an increase in price will leave total expenditure unchanged.

Question 20

When the actual price in a market is above the equilibrium price we would expect:

Accepted Answer

A) this higher price to be the new equilibrium. 
B) a shortage of the good or service. 
C) a surplus of the good or service. 
D) an excess demand or excess supply depending upon the extent of the difference between actual and equilibrium price. 
A) this higher price to be the new equilibrium. 
B) a shortage of the good or service. 
C) a surplus of the good or service. 
D) an excess demand or excess supply depending upon the extent of the difference between actual and equilibrium price.

Britain and Canada impose strict limits on reimbursements to hospitals and physicians as part of their universal "free" health care.This is a form of a:

Which one of the following is not a factor in the elasticity of demand for a good or service?

Along a linear demand curve,the price elasticity:

Which of the following is an example of price ceiling?

Suppose 100 pretzels are demanded at a given price.If the price of pretzels rises by 5% and the number of pretzels demanded falls to 92,it can be concluded that:.

Consider the demand curve Q = 3P^-1/2 ,when P =10 elasticity is:

Along a linear demand curve,the price elasticity:

If a price ceiling is imposed and the quantity demanded exceeds the quantity supplied,which of the following is not likely to occur?

The demand curve for water is downward sloping,indicating that:

For which one of the following commodities is the demand curve likely to be most elastic?

The equilibrium price of houses in the San Francisco Bay Area has risen dramatically in recent years because:

When the demand for a commodity decreases and its supply is vertical we can conclude that:

An excess supply for a product indicates that the price is:

Explain how a change in price affects total expenditure by filling in each cell with the resulting change in total expenditure.

A shift in the consumer's demand for a good X cannot result from a change in the:

When there is an excess supply of a good,there is a(n):

Which of the following market outcomes can be explained by the supply-demand model?

An increase in supply occurs when:

Which of the following statements about demand elasticity is correct?

When the actual price in a market is above the equilibrium price we would expect:

An Introduction to Microeconomics

The Theory of Consumer Choice

Individual and Market Demand

Using Consumer Choice Theory

Exchange, Efficiency, and Prices

Production

The Cost of Production

Profit Maximization in Perfectly Competitive Markets

Using the Competitive Model

Monopoly

Product Pricing With Monopoly Power

Monopolistic Competition and Oligopoly

Game Theory and the Economics of Information

Using Noncompetitive Market Models

Employment and Pricing of Inputs

Wages, Rent, Interest, and Profit

Using Input Market Analysis

General Equilibrium Analysis and Economic Efficiency

Public Goods and Externalities

Filters

Exam 2: Supply and Demand

Britain and Canada impose strict limits on reimbursements to hospitals and physicians as part of their universal "free" health care.This is a form of a:

Which one of the following is not a factor in the elasticity of demand for a good or service?

Along a linear demand curve,the price elasticity:

Which of the following is an example of price ceiling?

Suppose 100 pretzels are demanded at a given price.If the price of pretzels rises by 5% and the number of pretzels demanded falls to 92,it can be concluded that:.

Consider the demand curve Q = 3P-1/2 ,when P =10 elasticity is:

Along a linear demand curve,the price elasticity:

If a price ceiling is imposed and the quantity demanded exceeds the quantity supplied,which of the following is not likely to occur?

The demand curve for water is downward sloping,indicating that:

For which one of the following commodities is the demand curve likely to be most elastic?

The equilibrium price of houses in the San Francisco Bay Area has risen dramatically in recent years because:

When the demand for a commodity decreases and its supply is vertical we can conclude that:

An excess supply for a product indicates that the price is:

Explain how a change in price affects total expenditure by filling in each cell with the resulting change in total expenditure.

A shift in the consumer's demand for a good X cannot result from a change in the:

When there is an excess supply of a good,there is a(n):

Which of the following market outcomes can be explained by the supply-demand model?

An increase in supply occurs when:

Which of the following statements about demand elasticity is correct?

When the actual price in a market is above the equilibrium price we would expect:

An Introduction to Microeconomics

The Theory of Consumer Choice

Individual and Market Demand

Using Consumer Choice Theory

Exchange, Efficiency, and Prices

Production

The Cost of Production

Profit Maximization in Perfectly Competitive Markets

Using the Competitive Model

Monopoly

Product Pricing With Monopoly Power

Monopolistic Competition and Oligopoly

Game Theory and the Economics of Information

Using Noncompetitive Market Models

Employment and Pricing of Inputs

Wages, Rent, Interest, and Profit

Using Input Market Analysis

General Equilibrium Analysis and Economic Efficiency

Public Goods and Externalities

Filters

Consider the demand curve Q = 3P^-1/2 ,when P =10 elasticity is: