Exam 5: Market in Motion and Price Controls

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 increase as a result.

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

Exhibit 5-7 ​ -Refer to Exhibit 5-7. The movement from ____ to ____ is consistent with a strike by the Basque Shepherds Guild.

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

Which of the following is false?

A simultaneous increase in demand and decrease in supply would lead to:

If incomes are rising, in the market for an inferior good,

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

Exhibit 5-4 ​ -Refer to Exhibit 5-4. A movement from D₁ to D₂ could occur if:

The general consensus on minimum wage laws is that they:

A price floor is a legal minimum on the price at which a good or service can be sold.

If the government wanted to reduce the quantity of a good traded, it could do so by:

How does the equilibrium quantity traded change when there is an increase in supply and a decrease in demand?

If a price ceiling is not binding, then

If the supply curve for housing has the normal positive slope, rent controls are likely to:

A decrease in demand will cause a surplus at the original market price

Which of the following is not a result of rent controls?

If both the supply and demand for computer games increase, then the equilibrium price of the games:

When a binding price ceiling is imposed on a market to benefit buyers,

When a binding price floor is imposed on a market,