Question 1

When the demand for grapes increases and the supply of grapes decreases 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 2

A price ceiling will be binding only if it is set

Accepted Answer

A) ​equal to the equilibrium price. 
B) ​above the equilibrium price. 
C) ​below the equilibrium price. 
D) ​either above or below the equilibrium price. 
A) ​equal to the equilibrium price. 
B) ​above the equilibrium price. 
C) ​below the equilibrium price. 
D) ​either above or below the equilibrium price.

Question 3

Exhibit 5-1
​   ​
​
-Refer to Exhibit 5-1. A price ceiling set at $15 would cause a shortage of 10 units.

Accepted Answer

A) True 
 B)False

Question 4

A surplus exists in the market for Barbie dolls at the prevailing price. The surplus will be eliminated by a price:

Accepted Answer

A) ​increase, decreasing the supply and increasing the demand. 
B) ​decrease, decreasing the supply and increasing the demand. 
C) ​decrease, increasing the quantity supplied and increasing the quantity demanded. 
D) ​decrease, decreasing the quantity supplied and increasing the quantity demanded. 
A) ​increase, decreasing the supply and increasing the demand. 
B) ​decrease, decreasing the supply and increasing the demand. 
C) ​decrease, increasing the quantity supplied and increasing the quantity demanded. 
D) ​decrease, decreasing the quantity supplied and increasing the quantity demanded.

Question 5

​Exhibit 5-6  
-Refer to Exhibit 5-6. Starting with initial demand curves D0 and S0, a movement from ____ is consistent with an increase 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 6

Beach resorts raise their prices during the summer months and yet more people book rooms at those times. Is this a violation of the law of demand?

Accepted Answer

​No. During summer months, the demand fo

Question 7

If the government removes a binding price ceiling from a market, then the price paid by buyers will

Accepted Answer

A) ​increase, and the quantity exchanged will increase. 
B) ​increase, and the quantity exchanged will decrease. 
C) ​decrease, and the quantity exchanged will increase. 
D) ​decrease, and the quantity exchanged will decrease. 
A) ​increase, and the quantity exchanged will increase. 
B) ​increase, and the quantity exchanged will decrease. 
C) ​decrease, and the quantity exchanged will increase. 
D) ​decrease, and the quantity exchanged will decrease.

Question 8

Assuming that the demand and supply of a good both decreased by the same amount, the new equilibrium would represent:

Accepted Answer

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

Question 9

If a price ceiling is not binding, then it will have no effect on the market.

Accepted Answer

A) True 
 B)False

Question 10

Exhibit 5-4
​  
-Refer to Exhibit 5-4. The movement from ____ is consistent with an increase in supply​

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 11

A price floor will be binding only if it is set

Accepted Answer

A) ​equal to the equilibrium price. 
B) ​above the equilibrium price. 
C) ​below the equilibrium price. 
D) ​either above or below the equilibrium price. 
A) ​equal to the equilibrium price. 
B) ​above the equilibrium price. 
C) ​below the equilibrium price. 
D) ​either above or below the equilibrium price.

Question 12

Which of the following is true?

Accepted Answer

A) ​It is possible to eliminate a surplus by raising a price floor sufficiently. 
B) ​It is possible to create a surplus by raising a price ceiling sufficiently. 
C) ​It is possible to eliminate a shortage by raising a price ceiling sufficiently. 
D) ​It is possible to create a shortage by lowering a price floor sufficiently. 
A) ​It is possible to eliminate a surplus by raising a price floor sufficiently. 
B) ​It is possible to create a surplus by raising a price ceiling sufficiently. 
C) ​It is possible to eliminate a shortage by raising a price ceiling sufficiently. 
D) ​It is possible to create a shortage by lowering a price floor sufficiently.

Question 13

The imposition of a binding price ceiling on a market often results in:

Accepted Answer

A) ​an increase in investment in the industry. 
B) ​a surplus. 
C) ​a shortage. 
D) ​a decrease in discrimination on the part of sellers. 
A) ​an increase in investment in the industry. 
B) ​a surplus. 
C) ​a shortage. 
D) ​a decrease in discrimination on the part of sellers.

Question 14

If the prices of productive substitute goods decreased and productive technology improved at the same time, as a result:

Accepted Answer

A) ​prices would rise and there would be and an indeterminate effect on quantities exchanged. 
B) ​prices would fall and there would be and an indeterminate effect on quantities exchanged. 
C) ​prices would rise and larger quantities would be exchanged. 
D) ​prices would fall and larger quantities would be exchanged. 
A) ​prices would rise and there would be and an indeterminate effect on quantities exchanged. 
B) ​prices would fall and there would be and an indeterminate effect on quantities exchanged. 
C) ​prices would rise and larger quantities would be exchanged. 
D) ​prices would fall and larger quantities would be exchanged.

Question 15

Exhibit 5-2
​
The diagram below represents the market for butter.  
-Refer to Exhibit 5-2. If a price floor of $4 is imposed, ____ units of butter will be purchased.

Accepted Answer

A) 7,000 
B) ​5,000 
C) ​4,000 
D) ​3,000 
A) 7,000 
B) ​5,000 
C) ​4,000 
D) ​3,000

Question 16

An increase in demand for a product and a reduction in the costs of production would:

Accepted Answer

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

Question 17

Ceteris paribus, if negotiations lead to lower wages for airline employees, what will be the result in 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 18

If the government removes a binding price floor from a market, then the price paid by buyers will

Accepted Answer

A) ​increase, and the quantity exchanged will increase. 
B) ​increase, and the quantity exchanged will decrease. 
C) ​decrease, and the quantity exchanged will increase. 
D) ​decrease, and the quantity exchanged will decrease. 
A) ​increase, and the quantity exchanged will increase. 
B) ​increase, and the quantity exchanged will decrease. 
C) ​decrease, and the quantity exchanged will increase. 
D) ​decrease, and the quantity exchanged will decrease.

Question 19

An increase in the price of a close substitute for good A will:

Accepted Answer

A) ​increase demand, increase price and increase the quantity exchanged. 
B) ​increase demand, increase price and decrease the quantity exchanged. 
C) ​increase supply, increase price and increase the quantity exchanged. 
D) ​decrease demand, decrease price and decrease the quantity exchanged. 
A) ​increase demand, increase price and increase the quantity exchanged. 
B) ​increase demand, increase price and decrease the quantity exchanged. 
C) ​increase supply, increase price and increase the quantity exchanged. 
D) ​decrease demand, decrease price and decrease the quantity exchanged.

Question 20

Assuming that the demand for a good has decreased and the supply of a good has increased by the same amount, then:

Accepted Answer

A) ​The change in price is determinate but the change in quantity is indeterminate. 
B) ​The change in quantity is determinate but the change in price is indeterminate. 
C) ​Neither the change in price nor the change in quantity will be indeterminate. 
D) ​Both the change in price and the change in quantity will be indeterminate. 
A) ​The change in price is determinate but the change in quantity is indeterminate. 
B) ​The change in quantity is determinate but the change in price is indeterminate. 
C) ​Neither the change in price nor the change in quantity will be indeterminate. 
D) ​Both the change in price and the change in quantity will be indeterminate.

Exam 5: Market in Motion and Price Controls

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

A price ceiling will be binding only if it is set

Exhibit 5-1 ​ ​ ​ -Refer to Exhibit 5-1. A price ceiling set at $15 would cause a shortage of 10 units.

A surplus exists in the market for Barbie dolls at the prevailing price. The surplus will be eliminated by a price:

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

Beach resorts raise their prices during the summer months and yet more people book rooms at those times. Is this a violation of the law of demand?

If the government removes a binding price ceiling from a market, then the price paid by buyers will

Assuming that the demand and supply of a good both decreased by the same amount, the new equilibrium would represent:

If a price ceiling is not binding, then it will have no effect on the market.

Exhibit 5-4 ​ -Refer to Exhibit 5-4. The movement from ____ is consistent with an increase in supply​

A price floor will be binding only if it is set

Which of the following is true?

The imposition of a binding price ceiling on a market often results in:

If the prices of productive substitute goods decreased and productive technology improved at the same time, as a result:

Exhibit 5-2 ​ The diagram below represents the market for butter. -Refer to Exhibit 5-2. If a price floor of $4 is imposed, ____ units of butter will be purchased.

An increase in demand for a product and a reduction in the costs of production would:

Ceteris paribus, if negotiations lead to lower wages for airline employees, what will be the result in the market for air travel?

If the government removes a binding price floor from a market, then the price paid by buyers will

An increase in the price of a close substitute for good A will:

Assuming that the demand for a good has decreased and the supply of a good has increased by the same amount, 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 5-1 -Refer to Exhibit 5-1. A price ceiling set at $15 would cause a shortage of 10 units.

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

Exhibit 5-4 -Refer to Exhibit 5-4. The movement from ____ is consistent with an increase in supply

Exhibit 5-2 The diagram below represents the market for butter. -Refer to Exhibit 5-2. If a price floor of $4 is imposed, ____ units of butter will be purchased.