Question 1

Statement I: In 1973 and 1979 the United States dealt with a decrease in the supply of oil by letting the market solve the problem. Statement II: In 2005 the government avoided the problems of long gas lines by allowing the price of gasoline to rise.

Accepted Answer

A)  Statement I is true and statement II is false.
B)  Statement II is true and statement I is false.
C)  Both statements are true.
D)  Both statements are false.

Question 2

If quantity demanded is greater than quantity supplied

Accepted Answer

A)  the price will fall.
B)  the price will rise.
C)  the market is cleared.
D)  the price is at equilibrium.

Question 3

Which of the following government programs will create a shortage?

Accepted Answer

A)  Support prices.
B)  Ceiling prices.
C)  Sales tax.
D)  None of these choices will create a shortage.

Question 4

Use the following figure to answer the question : 
-Which of the following government programs will NOT create a surplus?

Accepted Answer

A)  Farm price support payments
B)  The minimum wage law
C)  Usury laws
D)  A price floor above the equilibrium price

Question 5

Use the following figure to answer the question :

-If price was set by the government at $11, there would be a price __________, that would cause a ___________ of ______ units.

Accepted Answer

A)  floor, surplus, 8
B)  floor, surplus, 10
C)  floor, shortage, 8
D)  ceiling, shortage, 12
E)  ceiling, surplus, 14

Question 6

Use the following Table to answer the question : 
-If the government set a price ceiling at $8

Accepted Answer

A)  there would be a temporary surplus, then prices would fall to equilibrium.
B)  there would be a permanent surplus, at least until the price floor was lifted.
C)  the price would fall back to the equilibrium price.
D)  the price floor would not have any effect on this market.

Question 7

Use the following figure to answer the question : 
-In the graph shown above, equilibrium price is _______.

Accepted Answer

A)  $25
B)  $30
C)  $35
D)  $40

Question 8

A change in the cost of production will generally prompt a change in _____.

Accepted Answer

The answer of A change in the cost of production...

Question 9

The supply curve displays the wishes of _____________.

Accepted Answer

The answer of The supply curve displays the wishes of...

Question 10

Use the following Table to answer the question : 
-When the price is $3

Accepted Answer

A)  quantity supplied is greater than quantity demanded and, therefore, price must rise to get back to equilibrium.
B)  quantity supplied is greater than quantity demanded and, therefore, price must fall to get back to equilibrium.
C)  quantity demanded is greater than quantity supplied and, therefore, price must rise to get back to equilibrium.
D)  quantity demanded is greater than quantity supplied and, therefore, price must fall to get back to equilibrium.
E)  None of these choices are correct.

Question 11

When a market operates so that there are no shortages and no surpluses, then the market is

Accepted Answer

A)  free.
B)  in equilibrium.
C)  in disequilibrium.
D)  subject to non-market intervention.

Question 12

When a price floor that has an impact is removed, which of the following statements is correct?

Accepted Answer

A)  Price of the good increases.
B)  Quantity supplied for that good decreases.
C)  Demand for that good increases.
D)  None of these choices are correct.

Question 13

Demand is defined as

Accepted Answer

A)  the quantity people would buy at a given price.
B)  the quantity needed by an individual during a given time.
C)  the amount of a good actually purchased during a given time.
D)  the quantities that buyers will purchase at different prices.

Question 14

Our price system is __________ by both price ceilings and price floors.

Accepted Answer

A)  distorted
B)  efficient
C)  unaffected
D)  None of these choices are correct.

Question 15

Which of the following is a method of rationing scarce goods and services?

Accepted Answer

A)  Standing in lines
B)  The price system
C)  Government issued books of coupons required for purchases
D)  All of the choices

Question 16

An increase in demand occurs when

Accepted Answer

A)  quantity demanded is greater than quantity supplied.
B)  quantity supplied is greater that quantity demanded.
C)  the demand curve shifts upward and to the right.
D)  there is a leftward shift in the demand curve.

Question 17

Which of the following government programs will create a surplus?

Accepted Answer

A)  Rent control
B)  The minimum wage law
C)  Usury laws
D)  Price controls on oil

Question 18

As price rises, quantity demanded

Accepted Answer

A)  rises.
B)  falls.
C)  remains the same.

Question 19

When supply rises and demand remains the same, equilibrium price ______ and equilibrium quantity ________.

Accepted Answer

The answer of When supply rises and demand remains the...

Question 20

As price falls, quantity supplied ___________.

Accepted Answer

The answer of As price falls, quantity supplied ___________....

Exam 4: Supply and Demand

When a price floor that has an impact is removed, which of the following statements is correct?

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Demand is defined as

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If quantity demanded is greater than quantity supplied

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Use the following Table to answer the question : -If the government set a price ceiling at $8

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Use the following figure to answer the question : -If price was set by the government at $11, there would be a price __________, that would cause a ___________ of ______ units.

Correct AnswerverifiedShow Answer

When a market operates so that there are no shortages and no surpluses, then the market is

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The supply curve displays the wishes of _____________.

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A change in the cost of production will generally prompt a change in _____.

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Use the following figure to answer the question : -Which of the following government programs will NOT create a surplus?

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Use the following Table to answer the question : -When the price is $3

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As price rises, quantity demanded

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Our price system is __________ by both price ceilings and price floors.

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Statement I: In 1973 and 1979 the United States dealt with a decrease in the supply of oil by letting the market solve the problem. Statement II: In 2005 the government avoided the problems of long gas lines by allowing the price of gasoline to rise.

Correct AnswerverifiedShow Answer

An increase in demand occurs when

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Which of the following is a method of rationing scarce goods and services?

Correct AnswerverifiedShow Answer

Which of the following government programs will create a surplus?

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Which of the following government programs will create a shortage?

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When supply rises and demand remains the same, equilibrium price ______ and equilibrium quantity ________.

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As price falls, quantity supplied ___________.

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Use the following figure to answer the question : -In the graph shown above, equilibrium price is _______.

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Use the following figure to answer the question : -If price was set by the government at $11, there would be a price ____, that would cause a _ of __ units.

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When supply rises and demand remains the same, equilibrium price and equilibrium quantity __.

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