Question 1

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.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A)  ​reduced incentives to build new rental housing
B)  ​reduced incentives for landlords to keep rental units in good repair
C)  ​increased discrimination against people deemed undesirable on the part of landlords
D)  ​increased turnover as tenants move more frequently from one rental unit to anotherE) All of the above
F) None of the above

Question 3

Exhibit 5-4
​ 1 to D2 could occur if: A) ​there is a decrease in the income of consumers and submarine sandwiches are inferior goods. B) ​there is an increase in the income of consumers and submarine sandwiches are inferior goods. C) ​the wages of submarine sandwich makers decrease D) ​the price of bread, used to make submarine sandwiches, increases" class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 5-4. A movement from D1 to D2 could occur if:

Accepted Answer

A)  ​there is a decrease in the income of consumers and submarine sandwiches are inferior goods.
B)  ​there is an increase in the income of consumers and submarine sandwiches are inferior goods.
C)  ​the wages of submarine sandwich makers decrease
D)  ​the price of bread, used to make submarine sandwiches, increasesE) B) and D)
F) A) and D)

Question 4

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

Accepted Answer

A)  ​Point A; Point I
B)  ​Point A; Point F
C)  ​Point A; Point D
D)  ​Point A; Point HE) None of the above
F) All of the above

Question 5

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

Accepted Answer

A)  ​its price will rise and the quantity exchanged will rise.
B)  ​its price will rise and the quantity exchanged will fall.
C)  ​its price will fall and the quantity exchanged will rise.
D)  ​its price will fall and the quantity exchanged will fall.E) B) and C)
F) A) and C)

Question 6

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

Accepted Answer

The impact on equilibrium quantity is in...

Question 7

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

Accepted Answer

A)  ​setting a price ceiling for the good below the equilibrium price.
B)  ​setting a price floor for the good above the equilibrium price.
C)  ​taxing the good more heavily.
D)  ​doing any of the above.E) B) and D)
F) None of the above

Question 8

When a binding price floor is imposed on a market,

Accepted Answer

A)  ​price no longer serves as a rationing device.
B)  ​the quantity supplied at the price floor exceeds the quantity that would have been supplied without the price floor.
C)  ​only some sellers benefit.
D)  ​All of the above are correct.E) A) and D)
F) C) and D)

Question 9

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

Accepted Answer

A)  ​is indeterminate and the equilibrium quantity rises.
B)  ​is indeterminate and the equilibrium quantity falls.
C)  ​falls and the equilibrium quantity also falls.
D)  ​falls and the change in equilibrium quantity is indeterminate.E) None of the above
F) All of the above

Question 10

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

Accepted Answer

A)  ​no buyers actually benefit.
B)  ​some buyers benefit but no buyers are harmed.
C)  ​some buyers benefit and some buyers are harmed.
D)  ​all buyers benefit.E) A) and B)
F) A) and C)

Question 11

Which of the following is false?

Accepted Answer

A)  ​If demand decreases and supply increases, the equilibrium price will rise.
B)  ​If supply decreases and demand remains the same, the equilibrium price will rise.
C)  ​if supply increases and demand decreases, the equilibrium price will fall.
D)  ​if demand increases and supply decreases, the equilibrium price will rise.E) A) and B)
F) A) and C)

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A)  ​An increase in the equilibrium price and a decrease in the quantity sold.
B)  ​An increase in both the equilibrium price and the quantity sold.
C)  ​A decrease in both the equilibrium price and the quantity sold.
D)  ​An uncertain effect on the equilibrium quantity but an increase in the equilibrium price.E) A) and D)
F) B) and C)

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A)  ​increase the quantity of available housing.
B)  ​improve the quality of available housing
C)  ​create a larger shortage than if the supply curve were vertical.
D)  ​help low-income families find suitable housing.E) A) and B)
F) A) and C)

Question 16

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) :

Accepted Answer

A)  ​decrease in price and an increase in equilibrium quantity.
B)  ​decrease in price and a decrease in equilibrium quantity.
C)  ​increase in price and a decrease in equilibrium quantity.
D)  ​indeterminate change in price and a decrease in equilibrium quantity.E) All of the above
F) C) and D)

Question 17

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.

Accepted Answer

A)  ​8,000
B)  ​5,000
C)  ​4,000
D)  ​3,000E) A) and C)
F) A) and B)

Question 18

If a price ceiling is not binding, then

Accepted Answer

A)  ​the equilibrium price is above the price ceiling.
B)  ​the equilibrium price is below the price ceiling.
C)  ​it cannot be legally enforced.
D)  ​None of the above is correct because all price ceilings must be binding.E) B) and D)
F) C) and D)

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

The general consensus on minimum wage laws is that they:

Accepted Answer

A)  ​do create some unemployment.
B)  ​Directly affect workers at all skill levels.
C)  ​lead to extremely low rates of unemployment.
D)  ​increase employment possibilities for teenagers.E) A) and D)
F) A) and C)

Exam 5: Market in Motion and Price Controls

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

Correct Answer
verified

When a binding price floor is imposed on a market,

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

The general consensus on minimum wage laws is that they:

Correct Answer
verified

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

Correct Answer
verified

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.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

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.

Correct Answer
verified

Which of the following is false?

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

If a price ceiling is not binding, then

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified
The impact on equilibrium quantity is in...
View Answer

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

Correct Answer
verified

Exam 5: Market in Motion and Price Controls

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

Correct AnswerverifiedShow Answer

When a binding price floor is imposed on a market,

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

The general consensus on minimum wage laws is that they:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

Which of the following is false?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

If a price ceiling is not binding, then

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedThe impact on equilibrium quantity is in...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

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.

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The impact on equilibrium quantity is in...
View Answer

Correct Answer
verified