Question 1

When the price of a good rises,the price is transmitting information indicating that the good has become relatively

Accepted Answer

A)   scarcer.
B)   less scarce.
C)   more plentiful in supply.
D)   b and c

Question 2

7/30/2017 4:16 PM
 
-Refer to Situation 4-1.An economist would have most likely predicted that the oil embargo imposed in 1974 would result in a

Accepted Answer

A)   leftward shift in the supply (curve) of gasoline.
B)   rightward shift in the supply (curve) of gasoline.
C)   leftward shift in the demand (curve) for gasoline.
D)   rightward shift in the demand (curve) for gasoline.
E)   both a and d

Question 3

A price floor is a government-mandated

Accepted Answer

A)   minimum price below which legal trades cannot be made.
B)   maximum price above which legal trades cannot be made.
C)   minimum price at which all units of the good must be legally sold.
D)   minimum price below which legal trades can be made.

Question 4

-Refer to Exhibit 4-9.Suppose that the government imposes a price ceiling at a price of $10._________ units would be exchanged in a free market,and ____________ units would be exchanged with the price ceiling in effect.

Accepted Answer

A)   150; 220
B)   150; 70
C)   110; 180
D)   150; 90

Question 5

-Refer to Exhibit 4-11.Suppose that the government imposes a price floor in the market for good ABC at a price of $7.The result of the price floor would be a ____________ of ______ units of good ABC.

Accepted Answer

A)   shortage; 110
B)   surplus; 110
C)   shortage; 30
D)   surplus; 30

Question 6

2 would not have an impact on the market. B)  Graph (2) : As supply increases,equilibrium price remains constant. C)  Graph (3) : As demand increases,equilibrium quantity remains constant. D)  Graph (4) : As supply increases,equilibrium quantity increases." class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 4-4.Which of the following statements is false?

Accepted Answer

A)   Graph (1) : A price ceiling set at P2 would not have an impact on the market.
B)   Graph (2) : As supply increases,equilibrium price remains constant.
C)   Graph (3) : As demand increases,equilibrium quantity remains constant.
D)   Graph (4) : As supply increases,equilibrium quantity increases.

Question 7

If the price of good X is $30 and the price of good Y is $5,it follows that the relative price of one unit of good X is approximately_____________ unit(s) of good Y.

Accepted Answer

A)   6.00
B)   2.00
C)   0.75
D)   0.25
E)   0.50

Question 8

F.What is the size of the total surplus at PF? A)  area 1 + 2 + 3 B)  area 1 + 2 + 3 + 4 C)  area 1 + 2 + 3 + 4 + 5 D)  area 1 + 2 + 3 + 4 + 5 + 6" class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 4-8.Suppose that wheat producers lobby the government for a price floor and receive one.This price floor is set at PF.What is the size of the total surplus at PF?

Accepted Answer

A)   area 1 + 2 + 3
B)   area 1 + 2 + 3 + 4
C)   area 1 + 2 + 3 + 4 + 5
D)   area 1 + 2 + 3 + 4 + 5 + 6

Question 9

If the price of good X is $90 and the price of good Y is $30,it follows that the relative price of one unit of good Y is ___________ unit(s) of good X.

Accepted Answer

A)   0.33
B)   1.33
C)   3.00
D)   2.00
E)   There is not enough information to answer the question.

Question 10

2 B)  N1 C)  N3 D)  N1 + N3" class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 4-7.How many unskilled workers do firms want to employ at the minimum wage?

Accepted Answer

A)   N2
B)   N1
C)   N3
D)   N1 + N3

Question 11

7/30/2017 4:16 PM
 
-Refer to Situation 4-1.If no price controls had been in place,the effect of the oil embargo on the equilibrium price and quantity of gasoline would have been

Accepted Answer

A)   an increase in both price and quantity.
B)   an increase in price and a decrease in quantity.
C)   a decrease in price and an increase in quantity.
D)   a decrease in both price and quantity.

Question 12

F.What is the quantity of wheat purchased at PF? A)  Q1 B)  Q2 C)  Q3 D)  Q2 - Q1" class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 4-8.Suppose that wheat producers lobby the government for a price floor and receive one.This price floor is set at PF.What is the quantity of wheat purchased at PF?

Accepted Answer

A)   Q1
B)   Q2
C)   Q3
D)   Q2 - Q1

Question 13

If the price of good X is $100 and the price of good Y is $25,it follows that the relative price of one unit of good X is _____________ unit(s) of good Y.

Accepted Answer

A)   1.00
B)   4.00
C)   0.25
D)   1.33
E)   0.75

Question 14

Which of the following statements is true?

Accepted Answer

A)   Price ceilings set below the equilibrium price cause shortages.
B)   Surpluses result when a price floor is set above the equilibrium price.
C)   Price ceililngs set above the equilibrium price cause surpluses.
D)   Price ceilings are set by the market and price floors are set by the government.
E)   ​a and b

Question 15

A deadweight loss is the loss to society of not producing the supply-and-demand determined level of output.

Accepted Answer

A) True 
 B)False

Question 16

-Exhibit 4-2 represents the orange juice market.The horizontal line at $2 shows a price ceiling imposed by the government.Which of the following statements is true at this price?

Accepted Answer

A)   At the price ceiling the surplus equals 400 units.
B)   At the price ceiling the shortage equals 400 units.
C)   At the price ceiling the surplus equals 300 units.
D)   At the price ceiling the shortage equals 200 units.
E)   none of the above

Question 17

A price floor (set above the equilibrium price) on rice will

Accepted Answer

A)   force otherwise profitable farmers out of business.
B)   result in a shortage of rice.
C)   result in a surplus of rice.
D)   clear the market for rice.
E)   both a and b

Question 18

3 is set as a price ceiling it will have an effect on the market for good X. B)  If price P3 is set as a price floor it will have an effect on the market for good X. C)  Price P3 is the equilibrium price for good X. D)  Price P3 is the highest price that can legally be charged in the market for good X." class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 4-3.Which of the following is true?

Accepted Answer

A)   If price P3 is set as a price ceiling it will have an effect on the market for good X.
B)   If price P3 is set as a price floor it will have an effect on the market for good X.
C)   Price P3 is the equilibrium price for good X.
D)   Price P3 is the highest price that can legally be charged in the market for good X.

Question 19

Someone says,"Even though the equilibrium wage rate is $8 an hour in the unskilled labor market,if we impose a minimum wage of $10 an hour,no one currently working will lose his or her job." This person must believe that the

Accepted Answer

A)   demand curve for unskilled labor is vertical.
B)   demand curve for unskilled labor is downward-sloping.
C)   supply curve for unskilled labor is downward-sloping.
D)   supply curve for unskilled labor is horizontal.
E)   none of the above.

Question 20

-Refer to Exhibit 4-9.Suppose that the government imposes a price ceiling at a price of $10.The number of units that would be exchanged in this market would be

Accepted Answer

A)   150,since that is the equilibrium quantity and the price ceiling is below the equilibrium price.
B)   220,since that is the number of units demanded at the price ceiling (and the quantity demanded is greater than the quantity supplied) .
C)   90,since that is the number of units supplied at the price ceiling (and the quantity supplied is less than the quantity demanded) .
D)   155,since that is the average of the quantity demanded and the quantity supplied at the price ceiling.

Exam 4: Prices: Free,controlled,and Relative

-Refer to Exhibit 4-8.Suppose that wheat producers lobby the government for a price floor and receive one.This price floor is set at PF.What is the quantity of wheat purchased at PF?

Correct AnswerverifiedShow Answer

-Exhibit 4-2 represents the orange juice market.The horizontal line at $2 shows a price ceiling imposed by the government.Which of the following statements is true at this price?

Correct AnswerverifiedShow Answer

-Refer to Exhibit 4-9.Suppose that the government imposes a price ceiling at a price of $10._________ units would be exchanged in a free market,and ____________ units would be exchanged with the price ceiling in effect.

Correct AnswerverifiedShow Answer

If the price of good X is $30 and the price of good Y is $5,it follows that the relative price of one unit of good X is approximately_____________ unit(s) of good Y.

Correct AnswerverifiedShow Answer

A price floor (set above the equilibrium price) on rice will

Correct AnswerverifiedShow Answer

-Refer to Exhibit 4-8.Suppose that wheat producers lobby the government for a price floor and receive one.This price floor is set at PF.What is the size of the total surplus at PF?

Correct AnswerverifiedShow Answer

7/30/2017 4:16 PM -Refer to Situation 4-1.If no price controls had been in place,the effect of the oil embargo on the equilibrium price and quantity of gasoline would have been

Correct AnswerverifiedShow Answer

Someone says,"Even though the equilibrium wage rate is $8 an hour in the unskilled labor market,if we impose a minimum wage of $10 an hour,no one currently working will lose his or her job." This person must believe that the

Correct AnswerverifiedShow Answer

-Refer to Exhibit 4-9.Suppose that the government imposes a price ceiling at a price of $10.The number of units that would be exchanged in this market would be

Correct AnswerverifiedShow Answer

7/30/2017 4:16 PM -Refer to Situation 4-1.An economist would have most likely predicted that the oil embargo imposed in 1974 would result in a

Correct AnswerverifiedShow Answer

If the price of good X is $90 and the price of good Y is $30,it follows that the relative price of one unit of good Y is ___________ unit(s) of good X.

Correct AnswerverifiedShow Answer

If the price of good X is $100 and the price of good Y is $25,it follows that the relative price of one unit of good X is _____________ unit(s) of good Y.

Correct AnswerverifiedShow Answer

A deadweight loss is the loss to society of not producing the supply-and-demand determined level of output.

Correct AnswerverifiedShow Answer

-Refer to Exhibit 4-3.Which of the following is true?

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

A price floor is a government-mandated

Correct AnswerverifiedShow Answer

When the price of a good rises,the price is transmitting information indicating that the good has become relatively

Correct AnswerverifiedShow Answer

-Refer to Exhibit 4-11.Suppose that the government imposes a price floor in the market for good ABC at a price of $7.The result of the price floor would be a ____________ of ______ units of good ABC.

Correct AnswerverifiedShow Answer

-Refer to Exhibit 4-7.How many unskilled workers do firms want to employ at the minimum wage?

Correct AnswerverifiedShow Answer

-Refer to Exhibit 4-4.Which of the following statements is false?

Correct AnswerverifiedShow Answer

-Refer to Exhibit 4-8.Suppose that wheat producers lobby the government for a price floor and receive one.This price floor is set at P_F.What is the quantity of wheat purchased at P_F?

Correct Answer
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-Refer to Exhibit 4-9.Suppose that the government imposes a price ceiling at a price of $10._ units would be exchanged in a free market,and ____ units would be exchanged with the price ceiling in effect.

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-Refer to Exhibit 4-8.Suppose that wheat producers lobby the government for a price floor and receive one.This price floor is set at P_F.What is the size of the total surplus at P_F?

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-Refer to Exhibit 4-11.Suppose that the government imposes a price floor in the market for good ABC at a price of $7.The result of the price floor would be a ______ of units of good ABC.

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