Question 1

Either a price floor or a price ceiling will result in a smaller quantity exchanged than if the price was at its equilibrium level.

Accepted Answer

A) True 
 B)False

Question 2

If American consumers decided to boycott grapes to protest working conditions of farm workers, everything else being equal, the:

Accepted Answer

A) ​price of grapes will rise. 
B) ​supply of grapes will fall. 
C) ​quantity of grapes supplied will fall. 
D) ​demand curve for grapes shifts to the right. 
A) ​price of grapes will rise. 
B) ​supply of grapes will fall. 
C) ​quantity of grapes supplied will fall. 
D) ​demand curve for grapes shifts to the right.

Question 3

Coca-Cola bottlers increased their prices as the price of sugar (an important ingredient in producing Coke) rose sharply in the late 1980s. Under these circumstances, the increase in the price of Coke occurs as a result of a(n):

Accepted Answer

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

Question 4

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

Accepted Answer

A) ​Price will change in the same direction as the shift in supply. 
B) ​Price will change in the same direction as the shift in demand. 
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 supply. 
B) ​Price will change in the same direction as the shift in demand. 
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 5

Which of the following could not cause an increase in both the equilibrium price and quantity of a good exchanged?

Accepted Answer

A) ​Increased input prices. 
B) ​Decreased incomes for an inferior good. 
C) ​An increase in the price of a substitute good. 
D) ​Increased tastes for the good. 
A) ​Increased input prices. 
B) ​Decreased incomes for an inferior good. 
C) ​An increase in the price of a substitute good. 
D) ​Increased tastes for the good.

Question 6

We can be sure that the equilibrium price will fall when:

Accepted Answer

A) ​supply and demand both increase. 
B) ​supply and demand both decrease. 
C) ​supply increases and demand decreases. 
D) ​supply decreases and demand increases. 
A) ​supply and demand both increase. 
B) ​supply and demand both decrease. 
C) ​supply increases and demand decreases. 
D) ​supply decreases and demand increases.

Question 7

Suppose there is a reduction in consumer income and an increase in the price of jet fuel, an important resource used to produce air travel. If air travel is a normal good, how will these changes influence the price and quantity of air travel? The price of air travel will (be) ____ and quantity purchased will (be) ____.

Accepted Answer

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

Question 8

A price ceiling set below the equilibrium price is nonbinding.

Accepted Answer

A) True 
 B)False

Question 9

In general, an increase in price could be caused by either:

Accepted Answer

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

Question 10

If tastes for a good decreased and the price of a substitute good decreased 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 11

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

Accepted Answer

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

Question 12

An increase in supply will cause a shortage at the original market price.

Accepted Answer

A) True 
 B)False

Question 13

An increase in the equilibrium price and the equilibrium quantity would be caused by an increase in supply.

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A) ​government sponsored ad campaigns that lead to an increase in vaccinations 
B) ​rent controls that lead to a decline in the quality of rental properties 
C) ​higher property taxes that allow for better public schools 
D) ​increased airport security measures that result in safer travel 
A) ​government sponsored ad campaigns that lead to an increase in vaccinations 
B) ​rent controls that lead to a decline in the quality of rental properties 
C) ​higher property taxes that allow for better public schools 
D) ​increased airport security measures that result in safer travel

Question 15

To say that a price ceiling is nonbinding is to say that the price ceiling

Accepted Answer

A) ​results in a surplus. 
B) ​is set above the equilibrium price. 
C) ​causes quantity demanded to exceed quantity supplied. 
D) ​All of the above are correct. 
A) ​results in a surplus. 
B) ​is set above the equilibrium price. 
C) ​causes quantity demanded to exceed quantity supplied. 
D) ​All of the above are correct.

Question 16

A price floor is binding when it is set

Accepted Answer

A) ​above the equilibrium price, causing a shortage. 
B) ​above the equilibrium price, causing a surplus. 
C) ​below the equilibrium price, causing a shortage. 
D) ​below the equilibrium price, causing a surplus. 
A) ​above the equilibrium price, causing a shortage. 
B) ​above the equilibrium price, causing a surplus. 
C) ​below the equilibrium price, causing a shortage. 
D) ​below the equilibrium price, causing a surplus.

Question 17

An increase in demand will cause a shortage at the original market price.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

In the market for natural gas, a particularly mild winter will lead to:

Accepted Answer

A) ​a decrease in the demand and an increase in both equilibrium price and quantity. 
B) ​an increase in the supply and an increase in both equilibrium price and quantity. 
C) ​an increase in the supply, a decrease in equilibrium price, and an increase in equilibrium quantity. 
D) ​a decrease in the demand and a decrease in both equilibrium price and quantity. 
A) ​a decrease in the demand and an increase in both equilibrium price and quantity. 
B) ​an increase in the supply and an increase in both equilibrium price and quantity. 
C) ​an increase in the supply, a decrease in equilibrium price, and an increase in equilibrium quantity. 
D) ​a decrease in the demand and a decrease in both equilibrium price and quantity.

Question 20

Which of the following could be responsible for an increase in the price of wheat?

Accepted Answer

A) ​an increase in the supply of wheat 
B) ​an increase in the demand for wheat 
C) ​a decrease in the demand for wheat 
D) ​a simultaneous increase in supply and decrease in demand for wheat 
A) ​an increase in the supply of wheat 
B) ​an increase in the demand for wheat 
C) ​a decrease in the demand for wheat 
D) ​a simultaneous increase in supply and decrease in demand for wheat

Either a price floor or a price ceiling will result in a smaller quantity exchanged than if the price was at its equilibrium level.

If American consumers decided to boycott grapes to protest working conditions of farm workers, everything else being equal, the:

Coca-Cola bottlers increased their prices as the price of sugar (an important ingredient in producing Coke) rose sharply in the late 1980s. Under these circumstances, the increase in the price of Coke occurs as a result of a(n):

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

Which of the following could not cause an increase in both the equilibrium price and quantity of a good exchanged?

We can be sure that the equilibrium price will fall when:

A price ceiling set below the equilibrium price is nonbinding.

In general, an increase in price could be caused by either:

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

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

An increase in supply will cause a shortage at the original market price.

An increase in the equilibrium price and the equilibrium quantity would be caused by an increase in supply.

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

To say that a price ceiling is nonbinding is to say that the price ceiling

A price floor is binding when it is set

An increase in demand will cause a shortage at the original market price.

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

In the market for natural gas, a particularly mild winter will lead to:

Which of the following could be responsible for an increase in the price of wheat?

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

Either a price floor or a price ceiling will result in a smaller quantity exchanged than if the price was at its equilibrium level.

If American consumers decided to boycott grapes to protest working conditions of farm workers, everything else being equal, the:

Coca-Cola bottlers increased their prices as the price of sugar (an important ingredient in producing Coke) rose sharply in the late 1980s. Under these circumstances, the increase in the price of Coke occurs as a result of a(n):

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

Which of the following could not cause an increase in both the equilibrium price and quantity of a good exchanged?

We can be sure that the equilibrium price will fall when:

A price ceiling set below the equilibrium price is nonbinding.

In general, an increase in price could be caused by either:

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

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

An increase in supply will cause a shortage at the original market price.

An increase in the equilibrium price and the equilibrium quantity would be caused by an increase in supply.

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

To say that a price ceiling is nonbinding is to say that the price ceiling

A price floor is binding when it is set

An increase in demand will cause a shortage at the original market price.

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

In the market for natural gas, a particularly mild winter will lead to:

Which of the following could be responsible for an increase in the price of wheat?

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