Question 1

There is an increase in demand for personal computers at the same time their input costs fall. We would expect that:

Accepted Answer

A) ​price will fall, but the effect on quantity sold is uncertain. 
B) ​the quantity sold will decline, but the effect on price is uncertain. 
C) ​the quantity sold will increase, but the effect on price is uncertain. 
D) ​price will rise, but the effect on quantity sold is uncertain. 
A) ​price will fall, but the effect on quantity sold is uncertain. 
B) ​the quantity sold will decline, but the effect on price is uncertain. 
C) ​the quantity sold will increase, but the effect on price is uncertain. 
D) ​price will rise, but the effect on quantity sold is uncertain. C

Question 2

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

Accepted Answer

A) True 
 B)False  True

Question 3

When a binding price floor is placed on a good, some suppliers who want to sell the good cannot do so.

Accepted Answer

A) True 
 B)False  True

Question 4

Prices have soared for parking facilities in downtown Dallas in recent months. Pressure from voters has convinced the Dallas City Council to impose a price ceiling of $5 on all parking garages and lots per day. What effect will this likely have on the market for parking spaces in Dallas? Who will gain? Who will lose?

Accepted Answer

​The $5 price ceiling will likely result

Question 5

A safety report is released that contends that sport utility vehicles are less prone to roll over during crashes than was previously thought. At the same time, the price of steel (used to produce motor vehicles) decreases. The net effect of these two incidents on the market for sport utility vehicles is a(n):

Accepted Answer

A) ​indeterminate change in price and an increase in equilibrium quantity. 
B) ​indeterminate change in price and a decrease in equilibrium quantity. 
C) ​decrease in price and an increase in equilibrium quantity. 
D) ​increase in price and an increase in equilibrium quantity. 
A) ​indeterminate change in price and an increase in equilibrium quantity. 
B) ​indeterminate change in price and a decrease in equilibrium quantity. 
C) ​decrease in price and an increase in equilibrium quantity. 
D) ​increase in price and an increase in equilibrium quantity.

Question 6

Cold weather in the Midwestern and eastern United States increases the popularity of vacations in sunny California. At the same time, the hotel employees' union in California negotiates a significant pay increase for its members. The likely impact on the hotel market in California is:

Accepted Answer

A) ​an increase in the price of hotel rooms and an increase in hotel room rentals. 
B) ​an increase in the price of hotel rooms and a decrease in hotel room rentals. 
C) ​an uncertain effect on the price of hotel rooms, but an increase in the quantity of hotel rooms rented. 
D) ​an increase in the price of hotel rooms, but an uncertain effect on the quantity of hotel rooms rented. 
A) ​an increase in the price of hotel rooms and an increase in hotel room rentals. 
B) ​an increase in the price of hotel rooms and a decrease in hotel room rentals. 
C) ​an uncertain effect on the price of hotel rooms, but an increase in the quantity of hotel rooms rented. 
D) ​an increase in the price of hotel rooms, but an uncertain effect on the quantity of hotel rooms rented.

Question 7

Starting from an equilibrium position,

Accepted Answer

A) ​the imposition of a price floor below the equilibrium price will increase the quantity demanded. 
B) ​the imposition of a price floor below the equilibrium price will decrease the quantity exchanged. 
C) ​the imposition of a price floor above the equilibrium price will decrease the quantity demanded. 
D) ​the imposition of a price floor above the equilibrium price will increase the quantity exchanged. 
A) ​the imposition of a price floor below the equilibrium price will increase the quantity demanded. 
B) ​the imposition of a price floor below the equilibrium price will decrease the quantity exchanged. 
C) ​the imposition of a price floor above the equilibrium price will decrease the quantity demanded. 
D) ​the imposition of a price floor above the equilibrium price will increase the quantity exchanged.

Question 8

If the price of a good increased,

Accepted Answer

A) It would also increase the quantity exchanged if it was caused by an increase in demand. 
B) It would also decrease the quantity exchanged if it was caused by an increase in supply. 
C) ​We would not know how quantity would change if we didn't know whether it was due a change in demand or a change in supply. 
D) ​All of the above would be true. 
A) It would also increase the quantity exchanged if it was caused by an increase in demand. 
B) It would also decrease the quantity exchanged if it was caused by an increase in supply. 
C) ​We would not know how quantity would change if we didn't know whether it was due a change in demand or a change in supply. 
D) ​All of the above would be true.

Question 9

When the demand for grapes decreases and the supply of grapes increases at the same time, we can predict that the:

Accepted Answer

A) ​price of grapes will fall. 
B) ​price of grapes will rise. 
C) ​quantity of grapes exchanged will fall. 
D) ​quantity of grapes exchanged will rise. 
A) ​price of grapes will fall. 
B) ​price of grapes will rise. 
C) ​quantity of grapes exchanged will fall. 
D) ​quantity of grapes exchanged will rise.

Question 10

Suppose the United States steps up efforts to combat drug trafficking and, with the aid of the Colombian military, destroys a significant percentage of cocaine crops. Predict the impact of increased drug interdiction on the market for cocaine in Los Angeles.

Accepted Answer

A) ​The supply of cocaine will increase causing the price of cocaine to increase. 
B) ​The demand for cocaine will increase causing the price of cocaine to increase. 
C) ​The supply of cocaine will decrease causing the price of cocaine to increase. 
D) ​There will be a movement up along the supply curve of cocaine. 
A) ​The supply of cocaine will increase causing the price of cocaine to increase. 
B) ​The demand for cocaine will increase causing the price of cocaine to increase. 
C) ​The supply of cocaine will decrease causing the price of cocaine to increase. 
D) ​There will be a movement up along the supply curve of cocaine.

Question 11

Which of the following would cause a decrease in both the price and quantity of a good exchanged?

Accepted Answer

A) ​A strike by production workers in the industry. 
B) ​A subsidy to the industry from the government. 
C) ​A decrease in advertising expenditures by the industry. 
D) ​A decrease in the price of a complement good. 
A) ​A strike by production workers in the industry. 
B) ​A subsidy to the industry from the government. 
C) ​A decrease in advertising expenditures by the industry. 
D) ​A decrease in the price of a complement good.

Question 12

The graph below depicts a(n):

Accepted Answer

A) ​supply increase. 
B) ​supply decrease. 
C) ​decrease in demand. 
D) ​increase in demand. 
A) ​supply increase. 
B) ​supply decrease. 
C) ​decrease in demand. 
D) ​increase in demand.

Question 13

For the price in a market to remain the same, while the quantity traded fell, both supply and demand would have to shift to the left.

Accepted Answer

A) True 
 B)False

Question 14

Assume a price floor is imposed at the current equilibrium price in the market for lettuce. If the demand for lettuce then increases:

Accepted Answer

A) ​a surplus of lettuce will be created. 
B) ​a shortage of lettuce will be created. 
C) ​the quantity of lettuce traded remains the same. 
D) ​the quantity of lettuce supplied will increase. 
A) ​a surplus of lettuce will be created. 
B) ​a shortage of lettuce will be created. 
C) ​the quantity of lettuce traded remains the same. 
D) ​the quantity of lettuce supplied will increase.

Question 15

If both the supply and demand curves shift to the left, then we can conclude that there will be a(n):

Accepted Answer

A) ​increase in the equilibrium quantity sold. 
B) ​decrease in the equilibrium quantity sold. 
C) ​increase in the equilibrium price. 
D) ​decrease in the equilibrium price. 
A) ​increase in the equilibrium quantity sold. 
B) ​decrease in the equilibrium quantity sold. 
C) ​increase in the equilibrium price. 
D) ​decrease in the equilibrium price.

Question 16

A binding price ceiling causes a shortage in the market.

Accepted Answer

A) True 
 B)False

Question 17

Exhibit 5-10   ​
-Refer to Exhibit 5-10. At price PR, what quantity of gasoline will be sold?

Accepted Answer

A) ​QS 
B) ​QD 
C) ​0 
D) ​the equilibrium quantity 
A) ​QS 
B) ​QD 
C) ​0 
D) ​the equilibrium quantity

Question 18

If both market demand and supply decrease simultaneously, then equilibrium quantity will (be) ____ and equilibrium price will (be) ____.

Accepted Answer

A) ​increase; increase 
B) ​indeterminate; decrease 
C) ​decrease; indeterminate 
D) ​decrease; decrease 
A) ​increase; increase 
B) ​indeterminate; decrease 
C) ​decrease; indeterminate 
D) ​decrease; decrease

Question 19

If there is a ceiling price below the equilibrium level, a decrease in demand will worsen the shortage.

Accepted Answer

A) True 
 B)False

Question 20

Exhibit 5-7   ​
-Refer to Exhibit 5-7. The movement from ____ to ____ is consistent with technological improvements in wool mills.

Accepted Answer

A) ​Point A; Point B 
B) ​Point A; Point F 
C) ​Point A; Point D 
D) ​Point A; Point I 
A) ​Point A; Point B 
B) ​Point A; Point F 
C) ​Point A; Point D 
D) ​Point A; Point I

There is an increase in demand for personal computers at the same time their input costs fall. We would expect that:

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

When a binding price floor is placed on a good, some suppliers who want to sell the good cannot do so.

Cold weather in the Midwestern and eastern United States increases the popularity of vacations in sunny California. At the same time, the hotel employees' union in California negotiates a significant pay increase for its members. The likely impact on the hotel market in California is:

Starting from an equilibrium position,

If the price of a good increased,

When the demand for grapes decreases and the supply of grapes increases at the same time, we can predict that the:

Suppose the United States steps up efforts to combat drug trafficking and, with the aid of the Colombian military, destroys a significant percentage of cocaine crops. Predict the impact of increased drug interdiction on the market for cocaine in Los Angeles.

Which of the following would cause a decrease in both the price and quantity of a good exchanged?

The graph below depicts a(n):

For the price in a market to remain the same, while the quantity traded fell, both supply and demand would have to shift to the left.

Assume a price floor is imposed at the current equilibrium price in the market for lettuce. If the demand for lettuce then increases:

If both the supply and demand curves shift to the left, then we can conclude that there will be a(n):

A binding price ceiling causes a shortage in the market.

Exhibit 5-10 -Refer to Exhibit 5-10. At price P_R, what quantity of gasoline will be sold?

If both market demand and supply decrease simultaneously, then equilibrium quantity will (be) and equilibrium price will (be) .

If there is a ceiling price below the equilibrium level, a decrease in demand will worsen the shortage.

Exhibit 5-7 -Refer to Exhibit 5-7. The movement from to is consistent with technological improvements in wool mills.

The Role and Method of 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

Filters

Exam 5: Market in Motion and Price Controls

There is an increase in demand for personal computers at the same time their input costs fall. We would expect that:

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

When a binding price floor is placed on a good, some suppliers who want to sell the good cannot do so.

Cold weather in the Midwestern and eastern United States increases the popularity of vacations in sunny California. At the same time, the hotel employees' union in California negotiates a significant pay increase for its members. The likely impact on the hotel market in California is:

Starting from an equilibrium position,

If the price of a good increased,

When the demand for grapes decreases and the supply of grapes increases at the same time, we can predict that the:

Suppose the United States steps up efforts to combat drug trafficking and, with the aid of the Colombian military, destroys a significant percentage of cocaine crops. Predict the impact of increased drug interdiction on the market for cocaine in Los Angeles.

Which of the following would cause a decrease in both the price and quantity of a good exchanged?

The graph below depicts a(n):

For the price in a market to remain the same, while the quantity traded fell, both supply and demand would have to shift to the left.

Assume a price floor is imposed at the current equilibrium price in the market for lettuce. If the demand for lettuce then increases:

If both the supply and demand curves shift to the left, then we can conclude that there will be a(n):

A binding price ceiling causes a shortage in the market.

Exhibit 5-10 ​ -Refer to Exhibit 5-10. At price PR, what quantity of gasoline will be sold?

If both market demand and supply decrease simultaneously, then equilibrium quantity will (be) ____ and equilibrium price will (be) ____.

If there is a ceiling price below the equilibrium level, a decrease in demand will worsen the shortage.

Exhibit 5-7 ​ -Refer to Exhibit 5-7. The movement from ____ to ____ is consistent with technological improvements in wool mills.

The Role and Method of 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

Filters

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

Exhibit 5-10 -Refer to Exhibit 5-10. At price P_R, what quantity of gasoline will be sold?

If both market demand and supply decrease simultaneously, then equilibrium quantity will (be) and equilibrium price will (be) .

Exhibit 5-7 -Refer to Exhibit 5-7. The movement from to is consistent with technological improvements in wool mills.