Question 1

Favored customers are customers who receive special treatment from dealers during periods of

Accepted Answer

A)  excess demand. 
B)  excess supply. 
C)  price above equilibrium. 
D)  equilibrium. 
A)  excess demand. 
B)  excess supply. 
C)  price above equilibrium. 
D)  equilibrium.

Question 2

A U.S. import fee on oil would reduce the domestic quantity of oil supplied.

Accepted Answer

A) True 
 B)False

Question 3

4.2 Supply and Demand Analysis: An Oil Import Fee
Refer to the information provided in Figure 4.4 below to answer the questions that follow.   Figure 4.4
-Refer to Figure 4.4. Assume that initially there is free trade. If the United States allowed drilling for more oil in the Gulf of Mexico, it could

Accepted Answer

A)  reduce U.S. oil imports without a tax. 
B)  decrease the demand for domestic oil. 
C)  reduce the supply of domestic oil. 
D)  increase the domestic price of oil. 
A)  reduce U.S. oil imports without a tax. 
B)  decrease the demand for domestic oil. 
C)  reduce the supply of domestic oil. 
D)  increase the domestic price of oil.

Question 4

A minimum price, set by the government, that sellers may charge for a good is known as

Accepted Answer

A)  a price floor. 
B)  a price rationing mechanism. 
C)  a price ceiling. 
D)  a subsidy. 
A)  a price floor. 
B)  a price rationing mechanism. 
C)  a price ceiling. 
D)  a subsidy.

Question 5

If the market price of green tea is $20.00 per pound and the government will not allow green tea growers to charge more than $25.00 per pound of green tea, which of the following will happen?

Accepted Answer

A)  Demand must eventually decrease so that the market will come into equilibrium at a price of $17.50. 
B)  There will be a shortage of green tea. 
C)  Supply must eventually increase so that the market will come into equilibrium at a price of $17.50. 
D)  The price ceiling will be ineffective and the market will remain in equilibrium. 
A)  Demand must eventually decrease so that the market will come into equilibrium at a price of $17.50. 
B)  There will be a shortage of green tea. 
C)  Supply must eventually increase so that the market will come into equilibrium at a price of $17.50. 
D)  The price ceiling will be ineffective and the market will remain in equilibrium.

Question 6

Refer to the information provided in Figure 4.1 below to answer the questions that follow.   Figure 4.1
-Refer to Figure 4.1. Assume that initially there is free trade. The quantity demanded of apples will be reduced by 2 million per day if the United States imposes a tax of ________ per apple.

Accepted Answer

A)  10 cents 
B)  20 cents 
C)  30 cents 
D)  40 cents 
A)  10 cents 
B)  20 cents 
C)  30 cents 
D)  40 cents

Question 7

A situation where illegal trading at market prices takes place is known in economics as a

Accepted Answer

A)  smuggler's market. 
B)  pirate market. 
C)  black market. 
D)  command market. 
A)  smuggler's market. 
B)  pirate market. 
C)  black market. 
D)  command market.

Question 8

Refer to the information provided in Figure 4.2 below to answer the questions that follow.   Figure 4.2
-Refer to Figure 4.2. The market is initially in equilibrium at the intersection of SS1U1B12S1U1B0and D,and supply shifts from SS1U1B12S1U1B0 to SS1U1B11S1U1B0Which of the following statements is true?

Accepted Answer

A)  Price will still serve as a rationing device causing quantity demanded to rise from 8 to 11 soft pretzels. 
B)  There is no need for price to serve as a rationing device in this case because the new equilibrium quantity is lower than the original equilibrium quantity. 
C)  Price will still serve as a rationing device causing quantity supplied to fall from 8 to 4 soft pretzels. 
D)  The market cannot move to a new equilibrium until there is also a change in supply. 
A)  Price will still serve as a rationing device causing quantity demanded to rise from 8 to 11 soft pretzels. 
B)  There is no need for price to serve as a rationing device in this case because the new equilibrium quantity is lower than the original equilibrium quantity. 
C)  Price will still serve as a rationing device causing quantity supplied to fall from 8 to 4 soft pretzels. 
D)  The market cannot move to a new equilibrium until there is also a change in supply.

Question 9

Refer to the information provided in Figure 4.6 below to answer the questions that follow.
Equilibrium in this market occurs at the intersection of curves S and D.   Figure 4.6
-Refer to Figure 4.6. At equilibrium, producer surplus is area

Accepted Answer

A)  A. 
B)  A + B + C. 
C)  G. 
D)  E + F + G. 
A)  A. 
B)  A + B + C. 
C)  G. 
D)  E + F + G.

Question 10

If the equilibrium price of gasoline is $4.00 per gallon and the government will not allow oil companies to charge more than $3.00 per gallon of gasoline, which of the following will happen?

Accepted Answer

A)  Demand must eventually decrease so that the market will come into equilibrium at a price of $3.00. 
B)  Supply must eventually increase so that the market will come into equilibrium at a price of $3.00. 
C)  A nonprice rationing system such as ration coupons must be used to ration the available supply of gasoline. 
D)  The market will be in equilibrium at a price of $3.00. 
A)  Demand must eventually decrease so that the market will come into equilibrium at a price of $3.00. 
B)  Supply must eventually increase so that the market will come into equilibrium at a price of $3.00. 
C)  A nonprice rationing system such as ration coupons must be used to ration the available supply of gasoline. 
D)  The market will be in equilibrium at a price of $3.00.

Question 11

A government-imposed maximum price will have no economic impact if

Accepted Answer

A)  it is below the equilibrium price. 
B)  it is at or below the equilibrium price. 
C)  it is above the equilibrium price. 
D)  there is a fixed supply of the good. 
A)  it is below the equilibrium price. 
B)  it is at or below the equilibrium price. 
C)  it is above the equilibrium price. 
D)  there is a fixed supply of the good.

Question 12

4.2 Supply and Demand Analysis: An Oil Import Fee
Refer to the information provided in Figure 4.4 below to answer the questions that follow.   Figure 4.4
-Refer to Figure 4.4. Assume that initially there is free trade. The price of oil in the United States will increase to $150 per barrel if the United States then imposes ________ tax per barrel of imported oil.

Accepted Answer

A)  no 
B)  a $25 
C)  a $50 
D)  a $100 
A)  no 
B)  a $25 
C)  a $50 
D)  a $100

Question 13

If the market price of a bowling ball is $125 and the full cost of producing it is $35, then a bowling ball producing firm gets producer surplus of

Accepted Answer

A)  $35. 
B)  $90. 
C)  $125. 
D)  $160. 
A)  $35. 
B)  $90. 
C)  $125. 
D)  $160.

Favored customers are customers who receive special treatment from dealers during periods of

A U.S. import fee on oil would reduce the domestic quantity of oil supplied.

4.2 Supply and Demand Analysis: An Oil Import Fee Refer to the information provided in Figure 4.4 below to answer the questions that follow. Figure 4.4 -Refer to Figure 4.4. Assume that initially there is free trade. If the United States allowed drilling for more oil in the Gulf of Mexico, it could

A minimum price, set by the government, that sellers may charge for a good is known as

If the market price of green tea is $20.00 per pound and the government will not allow green tea growers to charge more than $25.00 per pound of green tea, which of the following will happen?

Refer to the information provided in Figure 4.1 below to answer the questions that follow. Figure 4.1 -Refer to Figure 4.1. Assume that initially there is free trade. The quantity demanded of apples will be reduced by 2 million per day if the United States imposes a tax of ________ per apple.

A situation where illegal trading at market prices takes place is known in economics as a

Refer to the information provided in Figure 4.2 below to answer the questions that follow. Figure 4.2 -Refer to Figure 4.2. The market is initially in equilibrium at the intersection of S₂and D,and supply shifts from S₂ to S₁Which of the following statements is true?

Refer to the information provided in Figure 4.6 below to answer the questions that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -Refer to Figure 4.6. At equilibrium, producer surplus is area

If the equilibrium price of gasoline is $4.00 per gallon and the government will not allow oil companies to charge more than $3.00 per gallon of gasoline, which of the following will happen?

A government-imposed maximum price will have no economic impact if

If the market price of a bowling ball is $125 and the full cost of producing it is $35, then a bowling ball producing firm gets producer surplus of

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Introduction to Macroeconomics

Measuring National Output and National Income

Unemployment, Inflation, and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

Money, the Federal Reserve, and the Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Cost Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, Stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade, Comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing Economies

Critical Thinking About Research

Filters

Exam 4: Demand and Supply Applications

Favored customers are customers who receive special treatment from dealers during periods of

A U.S. import fee on oil would reduce the domestic quantity of oil supplied.

4.2 Supply and Demand Analysis: An Oil Import Fee Refer to the information provided in Figure 4.4 below to answer the questions that follow. Figure 4.4 -Refer to Figure 4.4. Assume that initially there is free trade. If the United States allowed drilling for more oil in the Gulf of Mexico, it could

A minimum price, set by the government, that sellers may charge for a good is known as

If the market price of green tea is $20.00 per pound and the government will not allow green tea growers to charge more than $25.00 per pound of green tea, which of the following will happen?

Refer to the information provided in Figure 4.1 below to answer the questions that follow. Figure 4.1 -Refer to Figure 4.1. Assume that initially there is free trade. The quantity demanded of apples will be reduced by 2 million per day if the United States imposes a tax of ________ per apple.

A situation where illegal trading at market prices takes place is known in economics as a

Refer to the information provided in Figure 4.2 below to answer the questions that follow. Figure 4.2 -Refer to Figure 4.2. The market is initially in equilibrium at the intersection of S2and D,and supply shifts from S2 to S1Which of the following statements is true?

Refer to the information provided in Figure 4.6 below to answer the questions that follow. Equilibrium in this market occurs at the intersection of curves S and D. Figure 4.6 -Refer to Figure 4.6. At equilibrium, producer surplus is area

If the equilibrium price of gasoline is $4.00 per gallon and the government will not allow oil companies to charge more than $3.00 per gallon of gasoline, which of the following will happen?

A government-imposed maximum price will have no economic impact if

If the market price of a bowling ball is $125 and the full cost of producing it is $35, then a bowling ball producing firm gets producer surplus of

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Introduction to Macroeconomics

Measuring National Output and National Income

Unemployment, Inflation, and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

Money, the Federal Reserve, and the Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Cost Shocks in the Asad Model

The Labor Market in the Macroeconomy

Financial Crises, Stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade, Comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing Economies

Critical Thinking About Research

Filters

Refer to the information provided in Figure 4.2 below to answer the questions that follow. Figure 4.2 -Refer to Figure 4.2. The market is initially in equilibrium at the intersection of S₂and D,and supply shifts from S₂ to S₁Which of the following statements is true?