Economics

A(n)___ market is a market in which goods or services are bought and sold illegally.

Black

If tortilla chips are a normal good, what happens to equilibrium price and quantity when there is an increase in income?

Equilibrium price increase and equilibrium quantity increases

The dictator of war-torn dictates that the most anyone can pay for a car is equivalent to $1,200 (a price below the equilibrium price for cars). If such a policy was put in place, it would be an example of a:

Price ceiling

For consumers, pizza and hamburgers are substitutes. A rise in the price of a pizza causes____ in the equilibrium price of a hamburger and ____ in the equilibrium quantity of hamburgers.

a rise: and increase

Which of the following will result in an increased price of milk?

a shift to the right of the demand curve

Which of the following always results in an increase in price and quantity?

an increase in demand with no change in supply

Supposed the government sets a price floor of $2.85 per bushel on corn when the current price is $2.55. This price floor will:

cause a surplus of corn

Quotas often?

cause a wedge between the supply price and demand price and discourages mutually beneficial transactions

Good X and Good Y are substitutes. Holding all other things constant, this means that when the price of Good X increases, the:

demand for Good Y will increaes

Effective price ceilings are inefficient because they?

do all of the above; create shortages, lead to wasted resources, decrease quality, create black markets

The market equilibrium is found at the:

price where quantity demanded equals quantity supplied

When the government removes a binding price floor:

quantity demanded would increase and quantity supplied would decrease

A quota is essentially a?

quantity restriction

When the price of lamps increases, the

quantity supplied increases

When the price of a good increases and the quantity demanded decreases, this often referred to as:

the law of demand

High-fructose corn syrup, which is derived from corn, is an important ingredient in the production of many sofl drinks. If the price of corn increases, one would expect:

the supply curve for soft drinks to shift left

Suppose the equilibrium price of Good Y is $5 and the equilibrium quantity is 150 units. If the current price of Good Y is $12:

there will be an excess supply of Good Y