1.The primary focus of the study of economics is with:
a. expanding the production of goods and services.
b. making the best use of scarce productive resources.
c. equalizing the distribution of consumer income and wealth.
d. reallocating resources from consumption to production in the economy.
2.What is the economic meaning of the expression that "there is no such thing as a free
lunch"?
a. It refers to "free-riders," who do not pay for the cost of a product, but who receive the
benefit from it.
b. It means that economic freedom is limited by the amount of income available to the
consumer.
c. It means that there is an opportunity cost when resources are used to provide "free"
d.
products.
It indicates that products only have value because people are willing to pay for them.
3.Tammie makes $150 a day as a bank clerk. She takes off two days of work without pay to
fly to another city to attend the concert of her favorite music group. The cost of
transportation for the trip is $250. The cost of the concert ticket is $50. The opportunity
cost of Tammie's trip to the concert is:
a. $300.
b. $450.
c. $500.
d. $600.
4.The value of the best alternative to any action you undertake is referred to as its:
a. production cost.
b. opportunity cost.
c. resource cost.
d. increasing cost.
5.After graduating from high school, Ron Willis plans to go to college. The college tuition is
$15,000 a year. But, instead of going to college, Ron could take a full-time job paying
$20,000. If Ron decides to go to college, what is his opportunity cost for attending for one
year?
a. $5,000
b. $15,000
c. $20,000
d. $35,000
6.The opportunity cost for a consumer who smokes cigarettes is the:
a. costs imposed on others who inhale tobacco smoke.
b. amount of tax levied on the cigarettes the consumer buys.
c. products that the consumer could have consumed instead of cigarettes.
d. cost of complementary products such as lighters, ashtrays, and cigarette holders.
7.The production possibilities curve represents which of the following?
a. the amount of goods attainable with variable resources
b. the maximum amount of goods attainable with variable resources
c. maximum combinations of goods attainable with fixed resources
d. the amount of goods attainable if prices decline
8.The production possibilities curve represents:
a. the maximum amount of labor and capital available for production.
b. combinations of goods and services among which consumers are indifferent.
c. maximum combinations of products available with fixed resources and technology.
d. the maximum rate of growth of capital and labor in an economy.
9.On a production possibilities curve, the single optimal or best combination of output for any
society:
a. is at a point near the top of the curve.
b. is at the precise midpoint of the curve.
c. is at a point near the bottom of the curve.
d. depends upon the preferences of society.
(The following economy produces two products.)
Product
Steel
Wheat
A
0
100
Production Possibilities
B
C
D
E
1
2
3
4
90
75
55
30
F
5
0
10. Refer to the above table. The total opportunity cost of the three units of steel is:
a.
b.
c.
d.
15 units of wheat.
20 units of wheat.
45 units of wheat.
55 units of wheat.
11. Refer to the above table. The marginal opportunity cost of the third unit of steel is:
a.
b.
c.
d.
10 units of wheat.
15 units of wheat.
20 units of wheat.
30 units of wheat.
12. Refer to the above table. A change from possibility C to B means that:
a. 1 unit of steel is given up to get 75 units of wheat.
b. 2 units of steel are given up to get 75 units of wheat.
c. 1 unit of steel is given up to get 15 more units of wheat.
d. 2 units of steel are given up to get 15 more units of wheat.
13. Refer to the above table. In moving from possibility C to D, the cost of a unit of steel in terms
of a unit of wheat is:
a. 10.
b. 20.
c. 25.
d. 30.
14. Refer to the above table. A change from possibility B to C means that:
a. 10 units of wheat are given up to get one more unit of steel.
b. 15 units of wheat are given up to get one more unit of steel.
c. 15 units of wheat are equal to one unit of steel.
d. 75 units of wheat are equal to one unit of steel.
15. Refer to the above table. In moving from possibility A to F, the cost of a unit of steel in terms
of a unit of wheat:
a. increases.
b. decreases.
c. remains constant.
d. increases from A to B, and decreases from B to F.
16. The two general types of economic systems that exist today are:
a. market systems and capitalism.
b. socialism and central planning.
c. market systems and command systems.
d. laissez faire systems and pure command systems.
17. Which of the following is a distinguishing feature of a command system?
a. private ownership of all capital.
b.
c.
d.
central planning.
heavy reliance on markets.
wide-spread dispersion of economic power.
18. Which of the following is a distinguishing feature of a market system?
a. public ownership of all capital.
b.
c.
d.
central planning.
wide-spread private ownership of capital.
a circular flow of goods, resources, and money.
19. Examples of command economies are:
a. the United States and Japan.
b.
c.
d.
Sweden and Norway.
Mexico and Brazil.
Cuba and North Korea.
20. Economic scarcity:
a. is peculiar to the United States economy.
b.
c.
d.
applies to all economies.
is peculiar to command systems.
is peculiar to market systems.
21. The division of labor means that:
a. labor markets are geographically segmented.
b.
c.
d.
unskilled workers outnumber skilled workers.
workers specialize in various production tasks.
each worker performs a large number of tasks.
22. Specialization in production is important primarily because it:
a. results in greater total output.
b. allows society to avoid the coincidence-of-wants problem.
c. allows society to trade by barter.
d. allows society to have fewer capital goods.
23. Specialization--the division of labor--enhances productivity and efficiency by:
a. allowing workers to take advantage of existing differences in their abilities and skills.
b. avoiding the time loss involved in shifting from one production task to another.
c. allowing workers to develop skills by working on one, or a limited number, of tasks.
d. all of the above means.
24. Which of the following is one of the Five Fundamental Questions?
a. Which products will be in scarce supply and which in excess supply?
b. Who should appoint the head of the central bank?
c. How much should the society save?
d. What goods and services will be produced?
25. The market system's answer to the fundamental question "How will the goods and services be
produced?" is essentially:
a. "With as much machinery as possible."
b. "Using the latest technology."
c. "By exploiting labor."
d. "At least-cost production."
26. The invisible-hand concept suggests that:
a. market failures imply the need for a national economic plan.
b. big businesses are inherently more efficient than small businesses.
c. the competitiveness of a capitalistic market economy invariably diminishes over
time.
d. assuming competition, private and public interests will coincide.
27. The invisible-hand concept suggests that:
a. changes in product demands are only randomly reflected in changes in the demands
for resources.
b. profit maximization is inconsistent with an efficient allocation of resources.
c. government action is necessary to correct for market failures.
d. when firms maximize their profits, society's output will also be maximized.
28. The simple circular flow model shows that:
a. households are on the buying side of both product and resource markets.
b. businesses are on the selling side of both product and resource markets.
c. households are on the selling side of the resource market and on the buying side of
the product market.
d. businesses are on the buying side of the product market and on the selling side of the
resource market.
29. Refer to the above diagram. Flow (1) represents:
a. wage, rent, interest, and profit income.
b.
land, labor, capital, and entrepreneurial ability.
c.
goods and services.
d. consumer expenditures.
30. Refer to the above diagram. Flow (2) represents:
a. wage, rent, interest, and profit income.
b.
c.
d.
land, labor, capital, and entrepreneurial ability.
goods and services.
consumer expenditures.
31. Refer to the above diagram. Flow (3) represents:
a. wage, rent, interest, and profit income.
b.
c.
d.
land, labor, capital, and entrepreneurial ability.
goods and services.
consumer expenditures.
32. Refer to the above diagram. Flow (4) represents:
a. wage, rent, interest, and profit income.
b.
c.
d.
land, labor, capital, and entrepreneurial ability.
goods and services.
consumer expenditures.
33. Refer to the above diagram. Arrows (1) and (2) represent:
a. goods and resources respectively.
b.
c.
d.
money incomes and output respectively.
output and money incomes respectively.
resources and goods respectively.
34. Refer to the above diagram. Arrows (3) and (4) represent:
a. goods and services respectively.
b. incomes and consumer expenditures respectively.
c. resources and goods respectively.
d. consumer expenditures and income respectively.
35. Refer to the above diagram. Arrows (1) and (3) are associated with:
a.
b.
the money market.
the resource market.
c.
the product market.
d. international trade.
36. Markets explained on the basis of supply and demand:
a. assume many buyers and many sellers of a standardized product.
b. assume market power so that buyers and sellers bargain with one another.
c. do not exist in the real-world economy.
d. are approximated by markets in which a single seller determines price.
37. The law of demand states that:
a. price and quantity demanded are inversely related.
b. the larger the number of buyers in a market, the lower will be product price.
c. price and quantity demanded are directly related.
d. consumers will buy more of a product at high prices than at low prices.
38. Graphically, the market demand curve is:
a. steeper than any individual demand curve that is part of it.
b. greater than the sum of the individual demand curves.
c. the horizontal sum of individual demand curves.
d. the vertical sum of individual demand curves.
39. The demand curve shows the relationship between:
a. money income and quantity demanded.
b.
c.
d.
price and production costs.
price and quantity demanded.
consumer tastes and the quantity demanded.
40. The relationship between quantity supplied and price is _____ and the relationship between
quantity demanded and price is _____.
a. direct, inverse
b. inverse, direct
c. inverse, inverse
d. direct, direct
41. When the price of a product increases, a consumer is able to buy less of it with a given money
income. This describes:
a. the cost effect.
b. the inflationary effect.
c. the income effect.
d. the substitution effect.
42. A demand curve:
a. shows the relationship between price and quantity supplied.
b. indicates the quantity demanded at each price in a series of prices.
c. graphs as an upsloping line.
d. shows the relationship between income and spending.
43. In presenting the idea of a demand curve economists presume that the most important variable
in determining the quantity demanded is:
a. the price of the product itself.
b.
c.
d.
consumer income.
the prices of related goods.
consumer tastes.
44. An increase in the price of a product will reduce the amount of it purchased because:
a. supply curves are upsloping.
b. the higher price means that real incomes have risen.
c. consumers will substitute other products for the one whose price has risen.
d. consumers substitute relatively high-priced for relatively low-priced products.
45. The income and substitution effects account for:
a. the upward sloping supply curve.
b.
c.
d.
the downward sloping demand curve.
movements along a given supply curve.
the "other things equal" assumption.
46. The equation for the demand curve in the above diagram:
a. is P = 70 - Q.
b. is P = 35 - 2Q.
c. is P = 35 - .5Q.
d. cannot be determined from the information given.
47. One reason that the quantity of a good demanded increases when its price falls is that the:
a. price decline shifts the supply curve to the left.
b. lower price shifts the demand curve to the left.
c. lower price shifts the demand curve to the right.
d. lower price increases the real incomes of buyers, enabling them to buy more.
48. Which of the following will not cause the demand for product K to change?
a. a change in the price of close-substitute product J
b. an increase in consumer incomes
c. a change in the price of K
d. a change in consumer tastes
49. Which of the following would not shift the demand curve for beef?
a. a widely publicized study that indicates beef increases one's cholesterol
b. a reduction in the price of cattle feed
c. an effective advertising campaign by pork producers
d. a change in the incomes of beef consumers
50. Which of the following would not shift the demand curve for beef?
a.
b.
c.
d.
a widely publicized study that indicates beef increases one's cholesterol
a reduction in the price of cattle feed
an effective advertising campaign by pork producers
a change in the incomes of beef consumers
51. An economist for a bicycle company predicts that, other things equal, a rise in consumer
incomes will increase the demand for bicycles. This prediction is based on the assumption
that:
a. there are many goods that are substitutes for bicycles.
b. there are many goods that are complementary to bicycles.
c. there are few goods that are substitutes for bicycles.
d. bicycles are normal goods.
52. A rightward shift in the demand curve for product C might be caused by:
a. an increase in income if C is an inferior good.
b. a decrease in income if C is a normal good.
c. a decrease in the price of a product that is a close substitute for C.
d. a decrease in the price of a product that is complementary to C.
53. If two goods are complements:
a. they are consumed independently.
b. an increase in the price of one will increase the demand for the other.
c. a decrease in the price of one will increase the demand for the other.
d. they are necessarily inferior goods.
54. If the demand curve for product B shifts to the right as the price of product A declines, then:
a. both A and B are inferior goods.
b.
c.
d.
A is a superior good and B is an inferior good.
A is an inferior good and B is a superior good.
A and B are complementary goods.
55. If the price of product L increases, the demand curve for close-substitute product J will:
a. shift downward toward the horizontal axis.
b.
c.
d.
shift to the left.
shift to the right.
remain unchanged.
56. If the price of K declines, the demand curve for the complementary product J will:
a.
b.
c.
d.
shift to the left.
shift to the right.
decrease.
remain unchanged.
57. If X is a normal good, a rise in money income will shift the:
a. supply curve for X to the left.
b.
c.
d.
supply curve for X to the right.
demand curve for X to the left.
demand curve for X to the right.
58. Other things equal, which of the following might shift the demand curve for gasoline to the
left?
a.
b.
c.
d.
the discovery of vast new oil reserves in Montana
the development of a low-cost electric automobile
an increase in the price of train and air transportation
a large decline in the price of automobiles
59. An inferior good is:
a. one whose demand curve will shift rightward as incomes rise.
b. one whose price and quantity demanded vary directly.
c. one which has not been approved by the Federal Food and Drug Administration.
d. not accurately defined by any of the above statements.
60. A decrease in demand is depicted by a:
a. move from point x to point y.
b.
c.
shift from D1 to D2.
shift from D2 to D1.
d. move from point y to point x.
61. A decrease in quantity demanded (as distinct from a decrease in demand) is depicted by a:
a. move from point x to point y.
b.
c.
shift from D1 to D2.
shift from D2 to D1.
d. move from point y to point x.
62. By an increase in demand we mean that :
a. product price has fallen so consumers move down to a new point on the demand
curve.
b. the quantity demanded at each price in a set of prices is greater.
c. the quantity demanded at each price in a set of prices is smaller.
d. a leftward shift of the demand curve has occurred.
63. The quantity demanded of a product increases as its price declines because the:
a. lower price shifts the demand curve rightward.
b.
c.
d.
lower price shifts the demand curve leftward.
lower price results in an increase in supply.
demand curve is downsloping.
64. The term quantity demanded:
a. refers to the entire series of prices and quantities that comprise the demand schedule.
b. refers to a situation in which the income and substitution effects do not apply.
c. refers to the amount of a product that will be purchased at some specific price.
d. means the same thing as demand.
65. An increase in the quantity demanded means that:
a. given supply, the price of the product can be expected to decline.
b. price has declined and consumers therefore want to purchase more of the product.
c. the demand curve has shifted to the right.
d. the demand curve has shifted to the left.
66. An increase in product price will cause:
a. quantity demanded to decrease.
b.
c.
d.
quantity supplied to decrease.
quantity demanded to increase.
the supply curve to shift to the right.
67. The law of supply indicates that:
a. producers will offer more of a product at high prices than they will at low prices.
b. the product supply curve is downsloping.
c. consumers will purchase less of a good at high prices than they will at low prices.
d. producers will offer more of a product at low prices than they will at high prices.
68. Refer to the above diagram. A decrease in supply is depicted by a:
a. move from point x to point y.
b.
c.
shift from S1 to S2.
shift from S2 to S1.
d. move from point y to point x.
69. Refer to the above diagram. An increase in quantity supplied (as distinct from an increase in
supply) is depicted by a:
a. move from point y to point x.
b. shift from S1 to S2.
c. shift from S2 to S1.
d. move from point x to point y.
70. Refer to the above diagram. An increase in quantity supplied (as distinct from an increase in
supply) is depicted by a:
a. move from point y to point x.
b. shift from S1 to S2.
c. shift from S2 to S1.
move from point x to point y.
71. The supply curve shows the relationship between:
a. price and quantity supplied.
b. production costs and the amount demanded.
c. total business revenues and quantity supplied.
d. physical inputs of resources and the resulting units of output.
72. An improvement in production technology will:
a. increase equilibrium price.
b.
c.
d.
shift the supply curve to the left.
shift the supply curve to the right.
shift the demand curve to the left.
73. Assume product A is an input in the production of product B. In turn product B is a
complement to product C. We can expect a decrease in the price of A to:
a. increase the supply of B and increase the demand for C.
b. decrease the supply of B and increase the demand for C.
c. decrease the supply of B and decrease the demand for C.
d. increase the supply of B and decrease the demand for C.
74. Suppose product X is an input in the production of product Y. Product Y in turn is a substitute
for product Z. An increase in the price of X can be expected to:
a. decrease the demand for Z.
b. increase the demand for Z.
c. have no effect on the demand for Z.
d. decrease the supply of Z.
75. Refer to the above table. If demand is represented by columns (3) and (2) and supply is
represented by columns (3) and (5), equilibrium price and quantity will be:
a. $10 and 60 units.
b. $9 and 50 units.
c. $8 and 60 units.
d. $7 and 50 units.
76. Refer to the above table. If demand is represented by columns (3) and (1) and supply is
represented by columns (3) and (4), equilibrium price and quantity will be:
a. $10 and 60 units.
b. $9 and 60 units.
c.
$8 and 80 units.
d. $7 and 30 units.
77. Refer to the above table. In relation to column (3), a change from column (2) to column (1)
would indicate a(n):
a. increase in demand.
b. decrease in demand.
c. increase in supply.
d. decrease in supply.
78. Refer to the above table. In relation to column (3), a change from column (5) to column (4)
would indicate a(n):
a. increase in demand.
b. decrease in demand.
c. increase in supply.
d. decrease in supply.
79. Refer to the above table. Suppose that demand is represented by columns (3) and (2) and
supply is represented by columns (3) and (5). If the price were artificially set at $9, a:
a. the market would clear.
b. a surplus of 20 units would occur.
c. a shortage of 20 units would occur.
d. demand would change from columns (3) and (2) to columns (3 and (1).
80. Refer to the above table. Suppose that demand is represented by columns (3) and (2) and
supply is represented by columns (3) and (5). If the price were artificially set at $6, a:
a. the market would clear.
b. a surplus of 40 units would occur.
c. a shortage of 40 units would occur.
d. demand would change from columns (3) and (2) to columns (3 and (1).
81. Refer to the above data. Equilibrium price will be:
a.
b.
c.
d.
$4.
$3.
$2.
$1.
82. Refer to the above data. If the price in this market was $4:
a.
b.
c.
d.
the market would clear; quantity demanded would equal quantity supplied.
buyers would want to purchase more wheat than is currently being supplied.
farmers would not be able to sell all their wheat.
there would be a shortage of wheat.
83. Refer to the above data. If price was initially $4 and free to fluctuate, we would expect:
a. quantity supplied to continue to exceed quantity demanded.
b. the quantity of wheat supplied to decline as a result of the subsequent price change.
c. the quantity of wheat demanded to fall as a result of the subsequent price change.
d. the price of wheat to rise.
84. Refer to the above diagram. The equilibrium price and quantity in this market will be:
a.
b.
c.
d.
$1.00 and 200.
$1.60 and 130.
$.50 and 130.
$1.60 and 290.
85. Refer to the above diagram. A surplus of 160 units would be encountered if price was:
a.
b.
c.
d.
$1.10, that is, $1.60 minus $.50.
$1.60.
$1.00.
$.50.
86. Refer to the above diagram. A shortage of 160 units would be encountered if price was:
a.
b.
c.
d.
$1.10, that is, $1.60 minus $.50.
$1.60.
$1.00.
$.50.
87. If a product is in surplus supply, its price:
a. is below the equilibrium level.
b.
c.
d.
is above the equilibrium level.
will rise in the near future.
is in equilibrium.
88. A market is in equilibrium:
a. provided there is no surplus of the product.
b. at all prices above that shown by the intersection of the supply and demand curves.
c. if the amount producers want to sell is equal to the amount consumers want to buy.
d. whenever the demand curve is downsloping and the supply curve is upsloping.
89. Refer to the above diagram. A price of $60 in this market will result in:
a.
b.
c.
d.
equilibrium.
a shortage of 50 units.
a surplus of 50 units.
a surplus of 100 units.
90. Refer to the above diagram. A price of $20 in this market will result in:
a. a shortage of 50 units.
b.
c.
d.
a surplus of 50 units.
a surplus of 100 units.
a shortage of 100 units.
91. Refer to the above diagram. The highest price that buyers will be willing and able to pay for
100 units of this product is:
a. $30.
b. $60.
c. $40.
d. $20.
92. Refer to the above diagram. If this is a competitive market, price and quantity will move
toward:
a. $60 and 100 respectively.
b.
c.
d.
$60 and 200 respectively.
$40 and 150 respectively.
$20 and 150 respectively.
93. In a competitive market the equilibrium price and quantity occur where:
a. the downsloping demand curve intersects the upsloping supply curve.
b. the upsloping demand curve intersects the downsloping supply curve.
c. consumers and suppliers bargain to a mutually acceptable price.
d. quantity demanded exceeds quantity supplied or vice versa.
94. Assume in a competitive market that price is initially above the equilibrium level. We can
predict that price will:
a. decrease, quantity demanded will decrease, and quantity supplied will increase.
b. decrease and quantity demanded and quantity supplied will both decrease.
c. decrease, quantity demanded will increase, and quantity supplied will decrease.
d. increase, quantity demanded will decrease, and quantity supplied will increase.
95. Assume in a competitive market that price is initially below the equilibrium level. We can
predict that price will:
a. decrease, quantity demanded will decrease, and quantity supplied will increase.
b. decrease and quantity demanded and quantity supplied will both decrease.
c. decrease, quantity demanded will increase, and quantity supplied will decrease.
d. increase, quantity demanded will decrease, and quantity supplied will increase.
96. Which of the following will cause a decrease in market equilibrium price and an increase in
equilibrium quantity?
a. an increase in supply.
b. an increase in demand.
c. a decrease in supply.
d. a decrease in demand.
97. Which of the following statements is correct?
a. If demand increases and supply decreases, equilibrium price will fall.
b. If supply increases and demand decreases, equilibrium price will fall.
c. If demand decreases and supply increases, equilibrium price will rise.
d. If supply declines and demand remains constant, equilibrium price will fall.
98. Refer to the above diagram, which shows demand and supply conditions in the competitive
market for product X. If the initial demand and supply curves are D0 and S0, equilibrium price
and quantity will be:
a. 0F and 0C respectively.
b. 0G and 0B respectively.
c. 0F and 0A respectively.
d. 0E and 0B respectively.
99. Refer to the above diagram, which shows demand and supply conditions in the competitive
market for product X. Given D0, if the supply curve moved from S0 to S1 , then:
a.
b.
c.
d.
supply has increased and equilibrium quantity has decreased.
supply has decreased and equilibrium quantity has decreased.
there has been an increase in the quantity supplied.
supply has increased and price has risen to 0G.
100.
Refer to the above diagram, which shows demand and supply conditions in the
competitive market for product X. If supply is S1 and demand D0, then
a.
b.
c.
d.
at any price above 0G a shortage would occur.
0F represents a price that would result in a surplus of AC.
a surplus of GH would occur.
0F represents a price that would result in a shortage of AC.
101.
Refer to the above diagram, which shows demand and supply conditions in the
competitive market for product X. A shift in the demand curve from D0 to D1 might be caused
by a(n):
a. decrease in income if X is an inferior good.
b. increase in the price of complementary good Y.
c. increase in money incomes if X is a normal good.
d. increase in the price of substitute product Y.
102.
Refer to the above diagram, which shows demand and supply conditions in the
competitive market for product X. Other things equal, a shift of the supply curve from S0 to S1
might be caused by a(n):
a. increase in the wage rates paid to laborers employed in the production of X.
b. government subsidy per unit of output paid to firms producing X.
c. decline in the price of the basic raw material used in producing X.
d. increase in the number of firms producing X.
103.
Refer to the above diagram, in which S1 and D1 represent the original supply and
demand curves and S2 and D2 the new curves. In this market:
a.
b.
c.
d.
supply has decreased and equilibrium price has increased.
demand has increased and equilibrium price has decreased.
demand has decreased and equilibrium price has decreased.
demand has increased and equilibrium price has increased.
104.
Refer to the above diagram, in which S1 and D1 represent the original supply and
demand curves and S2 and D2 the new curves. In this market:
a.
b.
c.
d.
the equilibrium position has shifted from M to K.
an increase in demand has been more than offset by an increase in supply.
the new equilibrium price and quantity are both greater than originally.
point M shows the new equilibrium position.
105.
Refer to the above diagram, in which S1 and D1 represent the original supply and
demand curves and S2 and D2 the new curves. In this market the indicated shift in supply may
have been caused by:
a. an increase in the wages paid to workers producing this good.
b. the development of more efficient machinery for producing this commodity.
c. this product becoming less fashionable.
d. an increase in consumer incomes.
106.
Refer to the above diagram, in which S1 and D1 represent the original supply and
demand curves and S2 and D2 the new curves. In this market the indicated shift in demand
may have been caused by:
a. a decline in the number of buyers in the market.
b. a decline in the price of a substitute good.
c. an increase in incomes if the product is a normal good.
d. an increase in incomes if the product is an inferior good.
107.
a.
b.
c.
d.
108.
a.
b.
c.
d.
109.
If government set a minimum price of $50 in the above market, a:
shortage of 21 units would occur.
shortage of 125 units would occur.
surplus of 21 units would occur.
surplus of 125 units would occur.
If government set a maximum price of $45 in the above market:
a shortage of 21 units would arise.
a surplus of 21 units would arise.
a surplus of 40 units would arise.
neither a shortage nor a surplus would arise.
A price floor means that:
a. inflation is severe in this particular market.
b. sellers are artificially restricting supply to raise price.
c. government is imposing a maximum legal price that is typically below the
equilibrium price.
d. government is imposing a minimum legal price that is typically above the
equilibrium price.
110.
d.
An effective ceiling price will:
induce new firms to enter the industry.
result in a product surplus.
result in a product shortage.
clear the market.
a.
b.
c.
d.
An effective price floor will:
force some firms in this industry to go out of business.
result in a product surplus.
result in a product shortage.
clear the market.
a.
b.
c.
111.
1.
Answer: B
2. Answer: C
3. Answer D
4. Answer B
5. Answer: D
6. Answer: C
7. Answer: C
8. Answer: C
9. Answer: D
10. Answer: C
11. Answer: C
12. Answer: C
13. Answer: B
14. Answer: B
15. Answer: A
16. Answer: C
17. Answer: B
18. Answer: C
19. Answer: D
20. Answer: B
21. Answer: C
22. Answer: A
23. Answer: D
24. Answer: D
25. Answer: D
26. Answer: D
27. Answer: D
28. Answer: C
29. Answer: A
30. Answer: B
31. Answer: C
32. Answer: D
33. Answer: D
34. Answer: B
35. Answer: B
36. Answer: A
37. Answer: A
38. Answer: C
39. Answer: C
40. Answer: A
41. Answer: C
42. Answer: B
43. Answer: A
44. Answer: C
45. Answer: B
46. Answer: C
47. Answer: D
48. Answer: C
49. Answer: B
50. Answer: B
51. Answer: D
52. Answer: D
53. Answer: C
54. Answer: D
55. Answer: C
56. Answer: B
57. Answer: D
58. Answer: B
59. Answer: D
60. Answer: C
61. Answer: D
62. Answer: B
63. Answer: D
64. Answer: C
65. Answer: B
66. Answer: A
67. Answer: A
68. Answer: C
69. Answer: A
70. Answer: A
71. Answer: A
72. Answer: C
73. Answer: A
74. Answer: B
75. Answer: C
76. Answer: B
77. Answer: A
78. Answer: D
79. Answer: B
80. Answer: C
81. Answer: C
82. Answer: C
83. Answer: B
84. Answer: A
85. Answer: B
86. Answer: D
87. Answer: B
88. Answer: C
89. Answer: D
90. Answer: D
91. Answer: B
92. Answer: C
93. Answer: A
94. Answer: C
95. Answer: D
96. Answer: A
97. Answer: B
98. Answer: A
99. Answer: B
100.
Answer: D
101.
Answer: B
102.
Answer: A
103.
Answer: B
104.
Answer: B
105.
Answer: B
106.
Answer: C
107.
Answer: C
108.
Answer: D
109.
Answer: D
110.
Answer: C
111.
Answer: B