Question 1

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

Accepted Answer

A)   area 1 + 2 + 3
B)   area 1 + 2 + 4
C)   area 3 + 5
D)   area 1 + 2 + 3 + 4 + 5
E)   area 6F) None of the above
G) A) and E)

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; 175E) None of the above
F) A) and C)

Question 3

Someone says,"Even though the equilibrium wage rate is $7 an hour in the unskilled labor market,if we impose a minimum wage of $8 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)   firms that hire unskilled laborers are earning high profits.
D)   firms that hire unskilled laborers have relatively low costs.
E)   none of the above.F) A) and D)
G) A) and B)

Question 4

Exhibit 4-8
 F. What is the change in the total surplus at the price floor,compared to at the equilibrium price? A)  There was a gain in total surplus equal to (area 1 + 2 + 3)  B)  There was a gain in total surplus equal to (area 1 + 2 + 3 + 4 + 5)  C)  There was a loss in total surplus equal to (area 4 + 5)  D)  There was a loss in total surplus equal to (area 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 change in the total surplus at the price floor,compared to at the equilibrium price?

Accepted Answer

A)   There was a gain in total surplus equal to (area 1 + 2 + 3) 
B)   There was a gain in total surplus equal to (area 1 + 2 + 3 + 4 + 5) 
C)   There was a loss in total surplus equal to (area 4 + 5) 
D)   There was a loss in total surplus equal to (area 4 + 5 + 6 ) E) None of the above
F) A) and D)

Question 5

In order for a price ceiling to have an impact on a market it must be set above the equilibrium price.

Accepted Answer

A) True 
 B)False

Question 6

A price ceiling 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 above which legal trades cannot be made.
D)   maximum price below which legal trades cannot be made.E) A) and B)
F) A) and C)

Question 7

Suppose the government imposes a price ceiling above the equilibrium price of a given good.Which of the following is the most likely result?

Accepted Answer

A)   Some other rationing device will emerge to allocate the good among buyers.
B)   Some buyers and sellers will be willing to risk breaking the law in order to exchange the goods.
C)   No change will occur in the market.
D)   There may be buyers who are willing to pay quite high prices so they can consume more than what they are consuming now.
E)   a, b, and dF) A) and B)
G) A) and C)

Question 8

There is currently a price floor in the market for transplanted kidneys,which has helped to create a shortage of transplanted kidneys.

Accepted Answer

A) True 
 B)False

Question 9

Exhibit 4-1
 
-Refer to Exhibit 4-1.How many fewer units are exchanged because of the price ceiling than ultimately would be exchanged in a free market?

Accepted Answer

A)   50
B)   60
C)   65
D)   100E) A) and B)
F) B) and D)

Question 10

A price ceiling set below 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)   induce new firms to enter the industry.E) None of the above
F) A) and D)

Question 11

Exhibit 4-8
 F. How many fewer units of wheat will be sold at the price floor than at the equilibrium price? A)  Q2 - Q1 B)  Q3 - Q2 C)  Q3 - Q1 D)  Q2" 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. How many fewer units of wheat will be sold at the price floor than at the equilibrium price?

Accepted Answer

A)   Q2 - Q1
B)   Q3 - Q2
C)   Q3 - Q1
D)   Q2E) A) and B)
F) A) and C)

Question 12

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

Accepted Answer

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

Question 13

Exhibit 4-9
 
-Refer to Exhibit 4-9. Suppose that the government imposes a price ceiling at a price of $13. _________ 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; 150
C)   110; 180
D)   150; 90E) All of the above
F) A) and B)

Question 14

List and describe the two major jobs performed by price.

Accepted Answer

Prices serve as: (1)a rationing device a...

Question 15

Suppose that the price of butter is $3 per pound and the price of margarine is $2 per pound. If the price of butter rises to $3.60 and the price of margarine rises to $3,then the absolute price of butter has _______________ and the relative price of butter has _______________.

Accepted Answer

A)   risen; fallen
B)   fallen; risen
C)   risen; risen
D)   fallen; fallenE) A) and B)
F) A) and C)

Question 16

Exhibit 4-6
 
-Refer to Exhibit 4-6.At a wage of $7,there will be a __________ of unskilled workers equal to __________ thousand workers.

Accepted Answer

A)   shortage; 10
B)   surplus; 20
C)   surplus; 10
D)   shortage; 20
E)   surplus; 15F) A) and E)
G) B) and E)

Question 17

Exhibit 4-7
 2 - N1)  persons B)  (N1 - N3)  persons C)  (N2 - N3)  persons D)  N3 persons E)  none of the above" class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 4-7.How many fewer persons work in the unskilled labor market at the minimum wage (WM) than at the equilibrium wage (W?) ?

Accepted Answer

A)   (N2 - N1)  persons
B)   (N1 - N3)  persons
C)   (N2 - N3)  persons
D)   N3 persons
E)   none of the aboveF) C) and D)
G) A) and B)

Question 18

Exhibit 4-6
 
-Refer to Exhibit 4-6.Suppose the minimum wage is set at $7.The result will be

Accepted Answer

A)   a surplus of unskilled workers.
B)   a shortage of unskilled workers.
C)   no effect on the market for unskilled labor.
D)   none of the aboveE) B) and C)
F) C) and D)

Question 19

Exhibit 4-3
 1 is a price ceiling,then A)  there is a surplus in the market for good X. B)  the highest price that can legally be charged in this market is P3. C)  the price at which exchange legally takes place is P2. D)  the price at which exchange legally takes place is P1. E)  both a and b" class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 4-3.If price P1 is a price ceiling,then

Accepted Answer

A)   there is a surplus in the market for good X.
B)   the highest price that can legally be charged in this market is P3.
C)   the price at which exchange legally takes place is P2.
D)   the price at which exchange legally takes place is P1.
E)   both a and bF) A) and B)
G) B) and E)

Question 20

Which of the following would not result from a price ceiling (set below equilibrium price) ?

Accepted Answer

A)   a shortage
B)   fewer exchanges
C)   an increase in supply
D)   nonprice rationing devicesE) C) and D)
F) B) and D)

Exam 4: Prices: Free, Controlled, and Relative

A price ceiling is a government-mandated

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List and describe the two major jobs performed by price.

Correct AnswerverifiedPrices serve as: (1)a rationing device a...View AnswerShow Answer

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

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.

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Exhibit 4-7 -Refer to Exhibit 4-7.How many fewer persons work in the unskilled labor market at the minimum wage (WM) than at the equilibrium wage (W?) ?

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Which of the following would not result from a price ceiling (set below equilibrium price) ?

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Suppose that the price of butter is $3 per pound and the price of margarine is $2 per pound. If the price of butter rises to $3.60 and the price of margarine rises to $3,then the absolute price of butter has _______________ and the relative price of butter has _______________.

Correct AnswerverifiedShow Answer

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

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Someone says,"Even though the equilibrium wage rate is $7 an hour in the unskilled labor market,if we impose a minimum wage of $8 an hour,no one currently working will lose his or her job." This person must believe that the

Correct AnswerverifiedShow Answer

A price ceiling set below the equilibrium price will

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 is the change in the total surplus at the price floor,compared to at the equilibrium price?

Correct AnswerverifiedShow Answer

Exhibit 4-9 -Refer to Exhibit 4-9. Suppose that the government imposes a price ceiling at a price of $13. _________ units would be exchanged in a free market,and ____________ units would be exchanged with the price ceiling in effect.

Correct AnswerverifiedShow Answer

There is currently a price floor in the market for transplanted kidneys,which has helped to create a shortage of transplanted kidneys.

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. How many fewer units of wheat will be sold at the price floor than at the equilibrium price?

Correct AnswerverifiedShow Answer

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

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Exhibit 4-6 -Refer to Exhibit 4-6.At a wage of $7,there will be a __________ of unskilled workers equal to __________ thousand workers.

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Suppose the government imposes a price ceiling above the equilibrium price of a given good.Which of the following is the most likely result?

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Exhibit 4-1 -Refer to Exhibit 4-1.How many fewer units are exchanged because of the price ceiling than ultimately would be exchanged in a free market?

Correct AnswerverifiedShow Answer

Exhibit 4-6 -Refer to Exhibit 4-6.Suppose the minimum wage is set at $7.The result will be

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In order for a price ceiling to have an impact on a market it must be set above the equilibrium price.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Prices serve as: (1)a rationing device a...
View Answer

Correct 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.

Correct Answer
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Correct Answer
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Suppose that the price of butter is $3 per pound and the price of margarine is $2 per pound. If the price of butter rises to $3.60 and the price of margarine rises to $3,then the absolute price of butter has _ and the relative price of butter has _.

Correct Answer
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Correct Answer
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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 is the change in the total surplus at the price floor,compared to at the equilibrium price?

Correct Answer
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Exhibit 4-9 -Refer to Exhibit 4-9. Suppose that the government imposes a price ceiling at a price of $13. _ units would be exchanged in a free market,and ____ units would be exchanged with the price ceiling in effect.

Correct Answer
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Correct Answer
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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. How many fewer units of wheat will be sold at the price floor than at the equilibrium price?

Correct Answer
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Exhibit 4-3 -Refer to Exhibit 4-3.If price P₁ is a price ceiling,then

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Exhibit 4-6 -Refer to Exhibit 4-6.At a wage of $7,there will be a of unskilled workers equal to thousand workers.

Correct Answer
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