Question 1

Exhibit 4-4 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 2

Exhibit 4-1 
-Refer to Exhibit 4-1.In a free market,________ units of the good would be exchanged.With a price ceiling,_______ units of the good would be exchanged.

Accepted Answer

A)  125;75
B)  75;125
C)  175;125
D)  125;175

Question 3

Exhibit 4-8 
-Refer to Exhibit 4-8.If the wheat market is in competitive equilibrium the total surplus will equal

Accepted Answer

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

Question 4

A minimum wage law (that sets the minimum wage above the equilibrium wage) can be expected to

Accepted Answer

A)  clear the market for unskilled workers.
B)  increase the number of unskilled workers employed.
C)  increase the number of firms in those industries where the law is effective.
D)  reduce the number of unskilled workers employed and/or reduce the number of hours worked by unskilled workers.
E)  all of the above

Question 5

If goods are not rationed according to price,if follows that

Accepted Answer

A)  they won't get rationed at all.
B)  some non-price rationing device will be used to ration the goods.
C)  first-come-first-served will necessarily be the rationing device used in the market.
D)  there will be surpluses in the market.
E)  none of the above

Question 6

Exhibit 4-3 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. B

Question 7

Exhibit 4-3 1 is a price floor,then A) the quantity exchanged is Q1. B) there is a surplus in the market for good X. C) it is the lowest price that can legally be charged in the market for good X. D) both b and c E) all of the above" class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 4-3.If price P1 is a price floor,then

Accepted Answer

A)  the quantity exchanged is Q1.
B)  there is a surplus in the market for good X.
C)  it is the lowest price that can legally be charged in the market for good X.
D)  both b and c
E)  all of the above

Question 8

One of the effects of a price floor (set above equilibrium price) is

Accepted Answer

A)  a surplus.
B)  higher-quality goods are produced.
C)  more satisfied customers.
D)  all of the above
E)  none of the above

Question 9

If the relative price of one unit of good Y is 0.25 units of good Z,then it follows that the absolute price of good Z can be __________ and the absolute price of good Y can be __________.

Accepted Answer

A)  $4,000;$2,000
B)  $1,000;$2,000
C)  $2,000;$1,000
D)  a and c
E)  none of the above

Question 10

Exhibit 4-1 
-Refer to Exhibit 4-1.The number of units exchanged at the price ceiling is

Accepted Answer

A)  75.
B)  125.
C)  175.
D)  100.

Question 11

Exhibit 4-7 3. B) N1. C) N2. D) N2 - N1." class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 4-7.The number of unskilled workers who want to work at the minimum wage is

Accepted Answer

A)  N3.
B)  N1.
C)  N2.
D)  N2 - N1.

Question 12

Exhibit 4-3 1 is set as a price ceiling it will have an effect on the market for good X. B) If price P1 is set as a price floor it will have an effect on the market for good X. C) Price P1 is the equilibrium price for good X. D) If price P1 is set as a price floor,then it 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 P1 is set as a price ceiling it will have an effect on the market for good X.
B)  If price P1 is set as a price floor it will have an effect on the market for good X.
C)  Price P1 is the equilibrium price for good X.
D)  If price P1 is set as a price floor,then it is the highest price that can legally be charged in the market for good X. A

Question 13

Exhibit 4-8 F.What is the size of the producers' surplus at PF? A) area 2 + 3 + 4 + 5 B) area 2 + 3 C) area 4 D) area 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 producers' surplus at PF?

Accepted Answer

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

Question 14

Exhibit 4-8 F.What has happened to the producers' surplus as a result of the imposition of the price floor? A) Producers' surplus has risen by (area 2 + 3)  B) Producers' surplus has fallen by (area 4 + 5)  C) Producers' surplus has changed by (area 3 - area 5)  D) Producers' surplus has changed by (area 2 - area 5) " 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 has happened to the producers' surplus as a result of the imposition of the price floor?

Accepted Answer

A)  Producers' surplus has risen by (area 2 + 3) 
B)  Producers' surplus has fallen by (area 4 + 5) 
C)  Producers' surplus has changed by (area 3 - area 5) 
D)  Producers' surplus has changed by (area 2 - area 5)

Question 15

There are two goods in the economy,apples and bread.The relative price of apples has increased.This could be due to

Accepted Answer

A)  an increase in the absolute price of apples,ceteris paribus.
B)  a decrease in the absolute price of bread,ceteris paribus.
C)  a decrease in the absolute price of apples,ceteris paribus.
D)  an increase in the absolute price of bread,ceteris paribus.
E)  a and b

Question 16

It is possible for the absolute price of a good to rise at the same time that the good's relative price is falling.

Accepted Answer

A) True 
 B)False

Question 17

The need for a rationing device results from scarcity.

Accepted Answer

A) True 
 B)False  True

Question 18

The minimum wage is an example of a

Accepted Answer

A)  price door.
B)  price wall.
C)  price floor.
D)  price ceiling.

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

A price floor set above the equilibrium price will

Accepted Answer

A)  clear the market for the good.
B)  result in a shortage of the good.
C)  result in a surplus of the good.
D)  force some firms in this industry to go out of business.

Exam 4: Prices: Free, controlled, and Relative

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

Correct AnswerverifiedShow Answer

Exhibit 4-1 -Refer to Exhibit 4-1.In a free market,________ units of the good would be exchanged.With a price ceiling,_______ units of the good would be exchanged.

Correct AnswerverifiedShow Answer

Exhibit 4-8 -Refer to Exhibit 4-8.If the wheat market is in competitive equilibrium the total surplus will equal

Correct AnswerverifiedShow Answer

A minimum wage law (that sets the minimum wage above the equilibrium wage) can be expected to

Correct AnswerverifiedShow Answer

If goods are not rationed according to price,if follows that

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedB

Exhibit 4-3 -Refer to Exhibit 4-3.If price P1 is a price floor,then

Correct AnswerverifiedShow Answer

One of the effects of a price floor (set above equilibrium price) is

Correct AnswerverifiedShow Answer

If the relative price of one unit of good Y is 0.25 units of good Z,then it follows that the absolute price of good Z can be __________ and the absolute price of good Y can be __________.

Correct AnswerverifiedShow Answer

Exhibit 4-1 -Refer to Exhibit 4-1.The number of units exchanged at the price ceiling is

Correct AnswerverifiedShow Answer

Exhibit 4-7 -Refer to Exhibit 4-7.The number of unskilled workers who want to work at the minimum wage is

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedA

Exhibit 4-8 -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 producers' surplus at PF?

Correct AnswerverifiedShow Answer

Exhibit 4-8 -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 has happened to the producers' surplus as a result of the imposition of the price floor?

Correct AnswerverifiedShow Answer

There are two goods in the economy,apples and bread.The relative price of apples has increased.This could be due to

Correct AnswerverifiedShow Answer

It is possible for the absolute price of a good to rise at the same time that the good's relative price is falling.

Correct AnswerverifiedShow Answer

The need for a rationing device results from scarcity.

Correct AnswerverifiedTrue

The minimum wage is an example of a

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

A price floor set above the equilibrium price will

Correct AnswerverifiedShow Answer

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Exhibit 4-1 -Refer to Exhibit 4-1.In a free market,__ units of the good would be exchanged.With a price ceiling,_ units of the good would be exchanged.

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B

Exhibit 4-3 -Refer to Exhibit 4-3.If price P₁ is a price floor,then

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If the relative price of one unit of good Y is 0.25 units of good Z,then it follows that the absolute price of good Z can be and the absolute price of good Y can be .

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A

Exhibit 4-8 -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 producers' surplus at P_F?

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Exhibit 4-8 -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 has happened to the producers' surplus as a result of the imposition of the price floor?

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True

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