Question 1

A flood damages many homes and farms in the Midwest. Shortly thereafter, the price of plywood rises significantly. The events suggest that:

Accepted Answer

A) ​a decrease in the supply of plywood caused the price of plywood to rise. 
B) ​an increase in the supply of plywood caused the price of plywood to rise. 
C) ​a decrease in the demand for plywood caused the price of plywood to rise. 
D) ​an increase in the demand for plywood caused the price of plywood to rise. 
A) ​a decrease in the supply of plywood caused the price of plywood to rise. 
B) ​an increase in the supply of plywood caused the price of plywood to rise. 
C) ​a decrease in the demand for plywood caused the price of plywood to rise. 
D) ​an increase in the demand for plywood caused the price of plywood to rise.

Question 2

Whenever there is a shortage at a particular price, the quantity sold at that price will equal:

Accepted Answer

A) ​the quantity demanded at that price. 
B) ​the quantity supplied minus the quantity demanded. 
C) ​the quantity supplied at that price. 
D) ​(quantity demanded plus quantity supplied)/2. 
A) ​the quantity demanded at that price. 
B) ​the quantity supplied minus the quantity demanded. 
C) ​the quantity supplied at that price. 
D) ​(quantity demanded plus quantity supplied)/2.

Question 3

Assume there is a price ceiling imposed on a good which is below the equilibrium price. Which of the following changes would reduce the size of the shortage?

Accepted Answer

A) ​an increase in demand 
B) ​a decrease in demand 
C) ​a decrease in supply 
D) ​a lower price ceiling 
A) ​an increase in demand 
B) ​a decrease in demand 
C) ​a decrease in supply 
D) ​a lower price ceiling

Question 4

A decrease in the current minimum wage would:

Accepted Answer

A) ​decrease employment for low skill workers. 
B) ​increase firm's demand curves for low skill workers. 
C) ​increase the supply of low skill workers. 
D) ​decrease the incomes of some low skill workers. 
A) ​decrease employment for low skill workers. 
B) ​increase firm's demand curves for low skill workers. 
C) ​increase the supply of low skill workers. 
D) ​decrease the incomes of some low skill workers.

Question 5

Ceteris paribus, if the price of jet fuel rose, what effect would it have on the market for air travel?

Accepted Answer

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

Question 6

The imposition of a binding price floor on a market causes quantity demanded to be

Accepted Answer

A) ​greater than quantity supplied. 
B) ​less than quantity supplied. 
C) ​equal to quantity supplied. 
D) ​Both (a) and (b) are possible. 
A) ​greater than quantity supplied. 
B) ​less than quantity supplied. 
C) ​equal to quantity supplied. 
D) ​Both (a) and (b) are possible.

Question 7

Exhibit 5-4
​  
-Refer to Exhibit 5-4. A movement from S1 to S3 could occur if:

Accepted Answer

A) ​there is a decrease in the price of submarine sandwiches 
B) ​there is an increase in price of ingredients such tomatoes and pickles 
C) ​there is a decrease in price of hamburgers, a substitute to submarine sandwiches 
D) ​the price of bread used to make submarine sandwiches decreases 
A) ​there is a decrease in the price of submarine sandwiches 
B) ​there is an increase in price of ingredients such tomatoes and pickles 
C) ​there is a decrease in price of hamburgers, a substitute to submarine sandwiches 
D) ​the price of bread used to make submarine sandwiches decreases

Question 8

Technological progress increases the efficiency of mass producing HDTV-capable television sets. At the same time, more cable and television networks begin broadcasting in HDTV format, increasing the appeal of HDTV-capable television sets. On the basis of this information, what can be said about conditions in the HDTV market?

Accepted Answer

A) ​The equilibrium quantity and price of HDTV-capable sets will increase. 
B) ​The equilibrium quantity of HDTV-capable sets will increase and price will decrease. 
C) ​The equilibrium quantity of HDTV-capable sets will increase and what happens to price is indeterminate. 
D) ​The equilibrium quantity of HDTV-capable sets will decrease and price will increase. 
A) ​The equilibrium quantity and price of HDTV-capable sets will increase. 
B) ​The equilibrium quantity of HDTV-capable sets will increase and price will decrease. 
C) ​The equilibrium quantity of HDTV-capable sets will increase and what happens to price is indeterminate. 
D) ​The equilibrium quantity of HDTV-capable sets will decrease and price will increase.

Question 9

Minimum wage laws have little or no effect in this segment.

Accepted Answer

A) ​Low-skilled Labor 
B) ​Teenagers 
C) ​Highly skilled workers 
D) ​Unemployed workers 
A) ​Low-skilled Labor 
B) ​Teenagers 
C) ​Highly skilled workers 
D) ​Unemployed workers

Question 10

When the demand and supply of grapes both increase at the same time, we can safely 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 11

Exhibit 5-4
​  
-Refer to Exhibit 5-4. The movement from ____ is consistent with a decrease in demand.

Accepted Answer

A) ​Point B to Point D 
B) ​Point D to Point B 
C) ​Point D to Point C 
D) ​Point C to Point D 
A) ​Point B to Point D 
B) ​Point D to Point B 
C) ​Point D to Point C 
D) ​Point C to Point D

Question 12

Exhibit 5-11
Panel (a)
Panel (b)   ​  
-Refer to Exhibit 5-11. A binding price ceiling is shown in

Accepted Answer

A) ​panel (a) only. 
B) ​panel (b) only. 
C) ​both panel (a) and panel (b). 
D) ​neither panel (a) nor panel (b). 
A) ​panel (a) only. 
B) ​panel (b) only. 
C) ​both panel (a) and panel (b). 
D) ​neither panel (a) nor panel (b).

Question 13

A price floor set above the equilibrium price is binding.

Accepted Answer

A) True 
 B)False

Question 14

If many more home sellers and builders have become more eager to sell their homes, we would expect to see:

Accepted Answer

A) ​an increase in equilibrium price and an increase in equilibrium quantity of homes sold. 
B) ​an increase in equilibrium price and a decrease in equilibrium quantity of homes sold. 
C) ​a decrease in equilibrium price and an increase in equilibrium quantity of homes sold. 
D) ​a decrease in equilibrium price and a decrease in equilibrium quantity of homes sold. 
A) ​an increase in equilibrium price and an increase in equilibrium quantity of homes sold. 
B) ​an increase in equilibrium price and a decrease in equilibrium quantity of homes sold. 
C) ​a decrease in equilibrium price and an increase in equilibrium quantity of homes sold. 
D) ​a decrease in equilibrium price and a decrease in equilibrium quantity of homes sold.

Question 15

A nonbinding price floor 
I.causes a surplus.
II.causes a shortagE.
III..is set at a price above the equilibrium pricE
IV.
Is set at a price below the equilibrium pricE.​

Accepted Answer

A) ​(iii) only 
B) ​(iv) only 
C) ​(i) and (iii) only 
D) ​(ii) and (iv) only 
A) ​(iii) only 
B) ​(iv) only 
C) ​(i) and (iii) only 
D) ​(ii) and (iv) only

Question 16

If tastes for a good decreased and the price of a substitute good increased at the same time, as a result:

Accepted Answer

A) ​prices would rise. 
B) ​prices would fall. 
C) ​larger quantities to be exchanged. 
D) ​we would not know which direction either prices or quantities exchanged would be altered without more information. 
A) ​prices would rise. 
B) ​prices would fall. 
C) ​larger quantities to be exchanged. 
D) ​we would not know which direction either prices or quantities exchanged would be altered without more information.

Question 17

If a price ceiling is not binding, then

Accepted Answer

A) ​there will be a surplus in the market. 
B) ​there will be a shortage in the market. 
C) ​the market will be less efficient than it would be without the price ceiling. 
D) ​there will be no effect on the market price or quantity sold. 
A) ​there will be a surplus in the market. 
B) ​there will be a shortage in the market. 
C) ​the market will be less efficient than it would be without the price ceiling. 
D) ​there will be no effect on the market price or quantity sold.

Question 18

An increase in costs associated with additional security measures taken by the airlines is most likely to lead to:

Accepted Answer

A) ​a decrease in equilibrium price and a decrease in equilibrium quantity. 
B) ​a decrease in equilibrium price and an increase in equilibrium quantity. 
C) ​an increase in equilibrium price and a decrease in equilibrium quantity. 
D) ​an increase in equilibrium price and no change equilibrium quantity. 
A) ​a decrease in equilibrium price and a decrease in equilibrium quantity. 
B) ​a decrease in equilibrium price and an increase in equilibrium quantity. 
C) ​an increase in equilibrium price and a decrease in equilibrium quantity. 
D) ​an increase in equilibrium price and no change equilibrium quantity.

Question 19

To be binding, a price floor must be set above the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 20

If a price floor is a binding constraint on a market, then

Accepted Answer

A) ​the equilibrium price must be above the price floor. 
B) ​the quantity demanded must exceed the quantity supplied. 
C) ​sellers cannot sell all they want to sell at the price floor. 
D) ​buyers cannot buy all they want to buy at the price floor. 
A) ​the equilibrium price must be above the price floor. 
B) ​the quantity demanded must exceed the quantity supplied. 
C) ​sellers cannot sell all they want to sell at the price floor. 
D) ​buyers cannot buy all they want to buy at the price floor.

A flood damages many homes and farms in the Midwest. Shortly thereafter, the price of plywood rises significantly. The events suggest that:

Whenever there is a shortage at a particular price, the quantity sold at that price will equal:

Assume there is a price ceiling imposed on a good which is below the equilibrium price. Which of the following changes would reduce the size of the shortage?

A decrease in the current minimum wage would:

Ceteris paribus, if the price of jet fuel rose, what effect would it have on the market for air travel?

The imposition of a binding price floor on a market causes quantity demanded to be

Exhibit 5-4 -Refer to Exhibit 5-4. A movement from S₁ to S₃ could occur if:

Minimum wage laws have little or no effect in this segment.

When the demand and supply of grapes both increase at the same time, we can safely predict that the:

Exhibit 5-4 -Refer to Exhibit 5-4. The movement from ____ is consistent with a decrease in demand.

Exhibit 5-11 Panel (a) Panel (b) -Refer to Exhibit 5-11. A binding price ceiling is shown in

A price floor set above the equilibrium price is binding.

If many more home sellers and builders have become more eager to sell their homes, we would expect to see:

A nonbinding price floor I.causes a surplus. II.causes a shortagE. III..is set at a price above the equilibrium pricE IV. Is set at a price below the equilibrium pricE.

If tastes for a good decreased and the price of a substitute good increased at the same time, as a result:

If a price ceiling is not binding, then

An increase in costs associated with additional security measures taken by the airlines is most likely to lead to:

To be binding, a price floor must be set above the equilibrium price.

If a price floor is a binding constraint on a market, then

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

A flood damages many homes and farms in the Midwest. Shortly thereafter, the price of plywood rises significantly. The events suggest that:

Whenever there is a shortage at a particular price, the quantity sold at that price will equal:

Assume there is a price ceiling imposed on a good which is below the equilibrium price. Which of the following changes would reduce the size of the shortage?

A decrease in the current minimum wage would:

Ceteris paribus, if the price of jet fuel rose, what effect would it have on the market for air travel?

The imposition of a binding price floor on a market causes quantity demanded to be

Exhibit 5-4 ​ -Refer to Exhibit 5-4. A movement from S1 to S3 could occur if:

Minimum wage laws have little or no effect in this segment.

When the demand and supply of grapes both increase at the same time, we can safely predict that the:

Exhibit 5-4 ​ -Refer to Exhibit 5-4. The movement from ____ is consistent with a decrease in demand.

Exhibit 5-11 Panel (a) Panel (b) ​ -Refer to Exhibit 5-11. A binding price ceiling is shown in

A price floor set above the equilibrium price is binding.

If many more home sellers and builders have become more eager to sell their homes, we would expect to see:

A nonbinding price floor I.causes a surplus. II.causes a shortagE. III..is set at a price above the equilibrium pricE IV. Is set at a price below the equilibrium pricE.​

If tastes for a good decreased and the price of a substitute good increased at the same time, as a result:

If a price ceiling is not binding, then

An increase in costs associated with additional security measures taken by the airlines is most likely to lead to:

To be binding, a price floor must be set above the equilibrium price.

If a price floor is a binding constraint on a market, then

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

Exhibit 5-4 -Refer to Exhibit 5-4. A movement from S₁ to S₃ could occur if:

Exhibit 5-4 -Refer to Exhibit 5-4. The movement from ____ is consistent with a decrease in demand.

Exhibit 5-11 Panel (a) Panel (b) -Refer to Exhibit 5-11. A binding price ceiling is shown in

A nonbinding price floor I.causes a surplus. II.causes a shortagE. III..is set at a price above the equilibrium pricE IV. Is set at a price below the equilibrium pricE.