Question 1

A shortage results when a

Accepted Answer

A) ​nonbinding price ceiling is imposed on a market. 
B) ​nonbinding price ceiling is removed from a market. 
C) ​binding price ceiling is imposed on a market. 
D) ​binding price ceiling is removed from a market. 
A) ​nonbinding price ceiling is imposed on a market. 
B) ​nonbinding price ceiling is removed from a market. 
C) ​binding price ceiling is imposed on a market. 
D) ​binding price ceiling is removed from a market.

Question 2

One common example of a price ceiling is rent control.

Accepted Answer

A) True 
 B)False

Question 3

When the supply of a good decreases and its demand increases by the same amount:

Accepted Answer

A) ​Price will change in the same direction as the shift in demand. 
B) ​Price will change in the same direction as the shift in supply. 
C) ​Quantity exchanged will change in the same direction as the shift in supply. 
D) ​Quantity exchanged will change in the same direction as the shift in demand. 
A) ​Price will change in the same direction as the shift in demand. 
B) ​Price will change in the same direction as the shift in supply. 
C) ​Quantity exchanged will change in the same direction as the shift in supply. 
D) ​Quantity exchanged will change in the same direction as the shift in demand.

Question 4

If a nonbinding price floor is imposed on a market, then the

Accepted Answer

A) ​quantity sold in the market will decrease. 
B) ​quantity sold in the market will stay the same. 
C) ​price in the market will increase. 
D) ​price in the market will decrease. 
A) ​quantity sold in the market will decrease. 
B) ​quantity sold in the market will stay the same. 
C) ​price in the market will increase. 
D) ​price in the market will decrease.

Question 5

A price floor set above the equilibrium price is not binding.

Accepted Answer

A) True 
 B)False

Question 6

A price ceiling set below the equilibrium price is binding.

Accepted Answer

A) True 
 B)False

Question 7

To be binding, a price floor must be set below the equilibrium pricE.​

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is an example of an unintended consequence?

Accepted Answer

A) ​first time tax credits that cause more home sales 
B) ​a price ceiling on gasoline that causes a gas shortage and leads some gas stations to go out of business. 
C) ​increased parking fines that lead to fewer violators 
D) ​all of the above 
A) ​first time tax credits that cause more home sales 
B) ​a price ceiling on gasoline that causes a gas shortage and leads some gas stations to go out of business. 
C) ​increased parking fines that lead to fewer violators 
D) ​all of the above

Question 9

A price ceiling set above the equilibrium price causes a surplus in the market.

Accepted Answer

A) True 
 B)False

Question 10

​Exhibit 5-6  
-Refer to Exhibit 5-6. Starting with initial demand curves D0 and S0, a movement from ____ is consistent with a decrease in both demand and supply.

Accepted Answer

A) ​Point A to Point I 
B) ​Point A to Point C 
C) ​Point A to Point F 
D) ​Point A to Point E 
A) ​Point A to Point I 
B) ​Point A to Point C 
C) ​Point A to Point F 
D) ​Point A to Point E

Question 11

Whenever there is a surplus 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 12

Refer to Exhibit 5-7. If the government were to remove a price ceiling of $2.00 per gallon in the milk market, the result would be:

Accepted Answer

A) ​a decrease in price and increase in the quantity of milk supplied. 
B) ​a decrease in price and increase in the quantity of milk demanded. 
C) ​an increase in both price and the quantity of milk supplied. 
D) ​an increase in both price and the quantity of milk demanded. 
A) ​a decrease in price and increase in the quantity of milk supplied. 
B) ​a decrease in price and increase in the quantity of milk demanded. 
C) ​an increase in both price and the quantity of milk supplied. 
D) ​an increase in both price and the quantity of milk demanded.

A shortage results when a

One common example of a price ceiling is rent control.

When the supply of a good decreases and its demand increases by the same amount:

If a nonbinding price floor is imposed on a market, then the

A price floor set above the equilibrium price is not binding.

A price ceiling set below the equilibrium price is binding.

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

Which of the following is an example of an unintended consequence?

A price ceiling set above the equilibrium price causes a surplus in the market.

Exhibit 5-6 -Refer to Exhibit 5-6. Starting with initial demand curves D₀ and S₀, a movement from ____ is consistent with a decrease in both demand and supply.

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

Refer to Exhibit 5-7. If the government were to remove a price ceiling of $2.00 per gallon in the milk market, the result would be:

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 shortage results when a

One common example of a price ceiling is rent control.

When the supply of a good decreases and its demand increases by the same amount:

If a nonbinding price floor is imposed on a market, then the

A price floor set above the equilibrium price is not binding.

A price ceiling set below the equilibrium price is binding.

To be binding, a price floor must be set below the equilibrium pricE.​

Which of the following is an example of an unintended consequence?

A price ceiling set above the equilibrium price causes a surplus in the market.

​Exhibit 5-6 -Refer to Exhibit 5-6. Starting with initial demand curves D0 and S0, a movement from ____ is consistent with a decrease in both demand and supply.

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

Refer to Exhibit 5-7. If the government were to remove a price ceiling of $2.00 per gallon in the milk market, the result would be:

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

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

Exhibit 5-6 -Refer to Exhibit 5-6. Starting with initial demand curves D₀ and S₀, a movement from ____ is consistent with a decrease in both demand and supply.