Question 1

Narrbegin Exhibit 4.3 Demand and supply curves   
-If the market demand and supply curves shift as given in Exhibit 4.3, the resulting new equilibrium will show a/an:

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. 
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.

Question 2

The reason individual homeowners usually do not hire a private contractor to fill the potholes on their street is because:

Accepted Answer

A)  it costs too much. 
B)  the value to the neighbourhood exceeds the cost of repair. 
C)  others who use the street will be free riders. 
D)  they do not trust the government. 
A)  it costs too much. 
B)  the value to the neighbourhood exceeds the cost of repair. 
C)  others who use the street will be free riders. 
D)  they do not trust the government.

Question 3

John paints the exterior of his house and, as a result, his neighbour Christine is able to sell her home for $5,000 more than she could have before. John's house-painting:

Accepted Answer

A)  creates a negative externality for Christine. 
B)  shows John is a free rider. 
C)  results in an efficient market outcome for both. 
D)  creates a positive externality for Christine. 
A)  creates a negative externality for Christine. 
B)  shows John is a free rider. 
C)  results in an efficient market outcome for both. 
D)  creates a positive externality for Christine.

Question 4

More information on the benefits of honey will result in more honey bought.

Accepted Answer

A) True 
 B)False

Question 5

Narrbegin Exhibit 4.2 Supply and demand curves   
-In Exhibit 4.2, which of the following might cause a shift from S1 to S2?

Accepted Answer

A)  An increase in the number of producers. 
B)  An improvement in technology. 
C)  A decrease in the number of producers. 
D)  An increase in consumer income. 
A)  An increase in the number of producers. 
B)  An improvement in technology. 
C)  A decrease in the number of producers. 
D)  An increase in consumer income.

Question 6

The private sector will not provide public goods because:

Accepted Answer

A)  it costs too much to produce. 
B)  consumers are likely to be free riders. 
C)  it is provided by government anyway. 
D)  it takes a long time to change the production. 
A)  it costs too much to produce. 
B)  consumers are likely to be free riders. 
C)  it is provided by government anyway. 
D)  it takes a long time to change the production.

Question 7

A way to reduce income inequality is:

Accepted Answer

A)  for governments to impose a progressive income tax. 
B)  for governments to reduce welfare payments. 
C)  for governments to pay welfare benefits to higher income earners. 
D)  for governments to stop intervening in the market. 
A)  for governments to impose a progressive income tax. 
B)  for governments to reduce welfare payments. 
C)  for governments to pay welfare benefits to higher income earners. 
D)  for governments to stop intervening in the market.

Question 8

Assume a price floor is set above the equilibrium price. The result is a surplus.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is the best example of a public good?

Accepted Answer

A)  Apples. 
B)  Cars. 
C)  Education. 
D)  National defence. 
A)  Apples. 
B)  Cars. 
C)  Education. 
D)  National defence.

Question 10

There was an extensive black market (illegal market) for many consumer products in the United States during the Second World War. A likely explanation of the black market is that:

Accepted Answer

A)  the prices of goods were artificially held down by price controls. 
B)  black markets were legal during the war. 
C)  goods were not subject to price controls. 
D)  gasoline rationing greatly restricted civilians from driving to stores. 
A)  the prices of goods were artificially held down by price controls. 
B)  black markets were legal during the war. 
C)  goods were not subject to price controls. 
D)  gasoline rationing greatly restricted civilians from driving to stores.

Question 11

Rent controls can result in:

Accepted Answer

A)  increasing rents received by landlords. 
B)  rising property values. 
C)  encouraging landlords to overspend for maintenance. 
D)  lower quality of housing. 
A)  increasing rents received by landlords. 
B)  rising property values. 
C)  encouraging landlords to overspend for maintenance. 
D)  lower quality of housing.

Question 12

Which of the following would be a private cost to a cigarette manufacturer?

Accepted Answer

A)  Price of leaf tobacco. 
B)  Cost to the government of the hospital expenses of indigent smokers. 
C)  Increased risk of cancer to the non-smoking passengers in the smoker's carpool. 
D)  Price of a pack of cigarettes. 
A)  Price of leaf tobacco. 
B)  Cost to the government of the hospital expenses of indigent smokers. 
C)  Increased risk of cancer to the non-smoking passengers in the smoker's carpool. 
D)  Price of a pack of cigarettes.

Question 13

A free rider is a person who:

Accepted Answer

A)  is harmed by another's actions. 
B)  is subject to a negative externality. 
C)  receives benefits from someone else's action but does not pay for them. 
D)  pays less than the full value for a product. 
A)  is harmed by another's actions. 
B)  is subject to a negative externality. 
C)  receives benefits from someone else's action but does not pay for them. 
D)  pays less than the full value for a product.

Question 14

If the government imposes a price ceiling above the market equilibrium price, then:

Accepted Answer

A)  there will be excess supply. 
B)  there will be excess demand. 
C)  the market equilibrium price will prevail. 
D)  the price set by the government will prevail. 
A)  there will be excess supply. 
B)  there will be excess demand. 
C)  the market equilibrium price will prevail. 
D)  the price set by the government will prevail.

Question 15

An economic justification for government providing public goods and services is that many people can benefit regardless of whether they pay or not.

Accepted Answer

A) True 
 B)False

Question 16

Ethical considerations mean that there is a support for a policy of:

Accepted Answer

A)  increasing taxes to lower income earners. 
B)  reducing taxes to higher income earners. 
C)  reducing income inequality below the equilibrium level. 
D)  reducing income inequality above the equilibrium level. 
A)  increasing taxes to lower income earners. 
B)  reducing taxes to higher income earners. 
C)  reducing income inequality below the equilibrium level. 
D)  reducing income inequality above the equilibrium level.

Question 17

Which of the following are examples of positive externalities?

Accepted Answer

A)  A loud noise from the neighbour's party. 
B)  Greenhouse emissions from electricity generation. 
C)  An unmowed lawn in a neighbourhood. 
D)  A rose garden planted by a neighbour. 
A)  A loud noise from the neighbour's party. 
B)  Greenhouse emissions from electricity generation. 
C)  An unmowed lawn in a neighbourhood. 
D)  A rose garden planted by a neighbour.

Question 18

Which if the following is the best example of a public good?

Accepted Answer

A)  Bread. 
B)  Fish in the ocean. 
C)  Scrambled satellite broadcasts. 
D)  National defence. 
A)  Bread. 
B)  Fish in the ocean. 
C)  Scrambled satellite broadcasts. 
D)  National defence.

Question 19

Narrbegin Exhibit 4.4 Demand and supply curves   
-In Exhibit 4.4, a movement from A to B is best explained by:

Accepted Answer

A)  an increase in income and in the number of suppliers. 
B)  an increase in the price of complements and an increase in the price of inputs. 
C)  an increase in income and a decrease in the number of producers. 
D)  an increase in the number of suppliers and a decrease in the price of substitutes. 
A)  an increase in income and in the number of suppliers. 
B)  an increase in the price of complements and an increase in the price of inputs. 
C)  an increase in income and a decrease in the number of producers. 
D)  an increase in the number of suppliers and a decrease in the price of substitutes.

Question 20

Cindy discovers that when she goes to the beach, she does not have to bring her radio. She can put her blanket near someone who has a radio and listen all day (without having to carry her radio, get sand in her speakers or buy new batteries). This is an example of:

Accepted Answer

A)  private property abuse. 
B)  external costs. 
C)  a negative externality. 
D)  a positive externality. 
A)  private property abuse. 
B)  external costs. 
C)  a negative externality. 
D)  a positive externality.

Narrbegin Exhibit 4.3 Demand and supply curves -If the market demand and supply curves shift as given in Exhibit 4.3, the resulting new equilibrium will show a/an:

The reason individual homeowners usually do not hire a private contractor to fill the potholes on their street is because:

John paints the exterior of his house and, as a result, his neighbour Christine is able to sell her home for $5,000 more than she could have before. John's house-painting:

More information on the benefits of honey will result in more honey bought.

Narrbegin Exhibit 4.2 Supply and demand curves -In Exhibit 4.2, which of the following might cause a shift from S₁ to S₂?

The private sector will not provide public goods because:

A way to reduce income inequality is:

Assume a price floor is set above the equilibrium price. The result is a surplus.

Which of the following is the best example of a public good?

There was an extensive black market (illegal market) for many consumer products in the United States during the Second World War. A likely explanation of the black market is that:

Rent controls can result in:

Which of the following would be a private cost to a cigarette manufacturer?

A free rider is a person who:

If the government imposes a price ceiling above the market equilibrium price, then:

An economic justification for government providing public goods and services is that many people can benefit regardless of whether they pay or not.

Ethical considerations mean that there is a support for a policy of:

Which of the following are examples of positive externalities?

Which if the following is the best example of a public good?

Narrbegin Exhibit 4.4 Demand and supply curves -In Exhibit 4.4, a movement from A to B is best explained by:

Cindy discovers that when she goes to the beach, she does not have to bring her radio. She can put her blanket near someone who has a radio and listen all day (without having to carry her radio, get sand in her speakers or buy new batteries). This is an example of:

Thinking Like an Economist

Applying Graphs to Economics

Production Possibilities and Opportunity Cost

Market Demand and Supply

Elasticity of Demand and Supply

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Policy Issues: Housing Affordability and Climate Change

Measuring the Size of the Economy

Business Cycles and Economic Growth

Inflation and Unemployment

A Simple Model of the Macro Economy

The Monetary and Financial System

Macroeconomic Policy I: Monetary Policy

Macroeconomic Policy II: Fiscal Policy

International Trade and Finance

Filters

Exam 5: Markets in Action

Narrbegin Exhibit 4.3 Demand and supply curves -If the market demand and supply curves shift as given in Exhibit 4.3, the resulting new equilibrium will show a/an:

The reason individual homeowners usually do not hire a private contractor to fill the potholes on their street is because:

John paints the exterior of his house and, as a result, his neighbour Christine is able to sell her home for $5,000 more than she could have before. John's house-painting:

More information on the benefits of honey will result in more honey bought.

Narrbegin Exhibit 4.2 Supply and demand curves -In Exhibit 4.2, which of the following might cause a shift from S1 to S2?

The private sector will not provide public goods because:

A way to reduce income inequality is:

Assume a price floor is set above the equilibrium price. The result is a surplus.

Which of the following is the best example of a public good?

There was an extensive black market (illegal market) for many consumer products in the United States during the Second World War. A likely explanation of the black market is that:

Rent controls can result in:

Which of the following would be a private cost to a cigarette manufacturer?

A free rider is a person who:

If the government imposes a price ceiling above the market equilibrium price, then:

An economic justification for government providing public goods and services is that many people can benefit regardless of whether they pay or not.

Ethical considerations mean that there is a support for a policy of:

Which of the following are examples of positive externalities?

Which if the following is the best example of a public good?

Narrbegin Exhibit 4.4 Demand and supply curves -In Exhibit 4.4, a movement from A to B is best explained by:

Cindy discovers that when she goes to the beach, she does not have to bring her radio. She can put her blanket near someone who has a radio and listen all day (without having to carry her radio, get sand in her speakers or buy new batteries). This is an example of:

Thinking Like an Economist

Applying Graphs to Economics

Production Possibilities and Opportunity Cost

Market Demand and Supply

Elasticity of Demand and Supply

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Policy Issues: Housing Affordability and Climate Change

Measuring the Size of the Economy

Business Cycles and Economic Growth

Inflation and Unemployment

A Simple Model of the Macro Economy

The Monetary and Financial System

Macroeconomic Policy I: Monetary Policy

Macroeconomic Policy II: Fiscal Policy

International Trade and Finance

Filters

Narrbegin Exhibit 4.2 Supply and demand curves -In Exhibit 4.2, which of the following might cause a shift from S₁ to S₂?