Econ Midterm 2

Assume that the demand fir diamonds is more elastic than the demand fir gasoline. Compared to the decline in purchases from a similar percentage tax on gasoline, we would expect that a tax on diamonds will cause the quantity of diamonds purchased to decline. A) more B) less C) the same D) neither more nor less

A) more

Taxi operators are required to purchase a medallion from municipal government.If the price of these medallions increased,one would expect to see the fares charged by taxi operators would A) rise;higher input prices caused reduction in supply B) rise;higher input prices cause an increase in demand C) rise;there would be more operators D) fall;passengers would substitute for bus

A) rise;higher input prices caused reduction in supply

The "buy and eat local" movement changes the structure of nearby farming industry because: A) the number of substitutes is decreased B) the number of substitutes is increased C) price making power is reduced D) non-economic barriers to entry reduced

A) the number of substitutes is decreased

The Canadian health care system which grants equal access by setting the price paid by consumers to zero, a practice guaranteed to create shortage and line hoe might be fair but it isn't efficient A) true B) false

A) true

If workers demand wage that is too high we will observe A) unemployment B)an excess supply of jobs C)a shortage of workers D) an excess demand for workers

A) unemployment

A competitive market will..........,economic surplus and therefore be efficient when the price is free to achieve its market clearing level. A)Maximize B) have no impact on C) Minimize D) reduce

A)Maximize

Minimum wage laws are an example of A) excess demand B) a price floor C) a price ceiling D) an equilibrium price

B) a price floor

Which of the following is not an outcome of rent ceiling A) a surplus of condominium houses B) black market prices below the rent controlled prices C) long waiting list for rent controlled housing D) a shortage of rental housing

B) black market prices below the rent controlled prices

Natural monopoly results in: A)advertising B) economies of scale C) copyrights D) unlawful practices

B) economies of scale

Increasing the minimum age required to purchase beer should mean that the price of beer will A) rise; brewers will take advantage of the situation B) fall;there will be fewer buyers in the beer market C) fall; there will be fewer sellers in the beer market D)rise;not everyone drinks beer

B) fall;there will be fewer buyers in the beer market

The market power of sellers increases as the demand curve facing the sellers becomes more A) elastic B) in elastic C) uncertain D) perfectly in elastic

B) in elastic

Price is unchanged but there has been a large reduction in the quantities bought and sold.this effect can only occur if; A) supply decreases and demand increases B) supply decreases and demand decreases C) supply decreases with no change in demand D) supply increases and demand increases

B) supply decreases and demand decreases

Which market structure has the lowest barriers of entry: A) natural monopoly B) monopolistic competition C) extreme competition D) pure monopoly E) oligopoly

C) extreme competition

If a larger saskatchewan wheats farmer withhold his entire crop from the market to wait for a higher price hid action will A) raise the price only in the shift run B) raise the price of whets significant but only for other farmers C) have no noticeable effect on the price of wheat D) raise the price only in the long run

C) have no noticeable effect on the price of wheat

Voluntary exchange A) requires disinterested consumers B) can make done people worse off C) is always mutually beneficial D) is illegal

C) is always mutually beneficial

If demand is perfectly elastic, sale tax collected by sellers(producers) will be: A) shared by consumers B) paid entirely by the consumers C) paid entirely by the producers D) have no impact on either consumers or producers

C) paid entirely by the producers

Business can cut costs and increases pricing power by any of these methods except: A) implementing a cost-saving technology B) finding lower-cost raw materials C) finding lower-cost suppliers D) advertising E) under-paying their workers

D) advertising

The distinction between price takers and price searchers is that price takers: A) are always small firms, and price searchers are always large firms B) never enjoy grants and privileges, where as price searchers always do C) are buyers, where as price searchers are sellers D) cannot raise their sales,whereas price searchers can

D) cannot raise their sales,whereas price searchers can

When the canadian medical association predicts an imminent surplus of physicians by comparing the quantity of services that they expect to be supplied with the quantity of physicians services that they expect to be supplied with the quantity they expected to be demanded is: A) performing a public service B)predicting that physician incomes will rise: C) predicting that physicians services will no longer be scarce goods D)assuming a continuing high price for physicians

D)assuming a continuing high price for physicians

An example of an industry that matches most of the characteristics of monopolistic competition is: A) cable television B) oil C) electricity D)strawberry E) breakfast cereals

E) breakfast cereals