Economy

If people tend to go swimming more in the summer than the winter then we would expect ___ to be higher in the summer. All that apply a. The quantity of swimsuits bought and sold b. The price of swimsuits c. The demand for swimsuits d. The supply of swimsuits

All but d

A price ___ is a maximum allowable price specified by law

Ceiling

In a ____ economy, people decide for themselves which careers to pursue and which products to produce or buy.

Free-market

A change in quantity of demand is represented by ___. a. A shift in the entire demand curve a. Movement along the demand curve

b

A change in the quantity supplied is represented by ___. a. A shift in the entire supply curve b. Movement along the supply curve

b

If the demand for apartments decreases when house prices falls, then this suggests that apartments and houses are ___. a. Complements b. Normal c. Substitutes e. Inferior

c

In the figure, the movement from S to S' represents a(n) a. Decrease in quantity supplied b. Decrease in supply c. Increase in supply d. Increase in quantity supplied

c

Rent control lead to excess ___.

demand

The ____ for any good consists of all the buyers and sellers of that good

market

A change in demand is represented by a ___. a. Shift in the entire demand curve b. Movement along the demand curve

a

A change in supply is represented by ___. a. A shift in the entire supply curve b. Movement along the supply curve

a

A shift in the supply curve represents a change in ___. a. Supply b. The quantity supplied

a

Along a supply curve, if the price of butter increases, the quantity of butter supplied will ___. a. Increase b. Decrease

a

Suppose that the price of movie tickets increases, people stop going to the movies as often because they can no longer afford to do so. This reduction in quantity of movie tickets demanded is known as the ____ of a price change. a. Income effect b. Substitution effect

a

Two goods are complements if the increase in price of one good leads to the ___ in demand of the other. a. Increase (rightward shift) b. Decrease (leftward shift)

b

Two goods are substitutes if ___. a. An increase in price of one good, leads to an increase in demand for the other. b. An increase in price of one good, leads to a decrease in demand for the other.

a

Failure to achieve economic efficiency means that ___. All that apply a. Everyone in the economy could be made better off b. The market is not in equilibrium c. Total economic surplus is not maximized

a and c

If a late frost damages part of this years orange crop, this should lead to ___. Select all that apply a. An increase in the price of oranges b. A decrease in the price of oranges c. A decrease in the number of oranges bought and sold in the market d. An increase in the number of oranges bought and sold in the market

a and c

In which of the following situations is the market equilibrium likely to be economically inefficient? Select all that apply a. A market in which the production of the good entails a significant cost to others (like pollution from the production process. b. A market for an inferior good when income increases or for a normal good when income decreases c. A market in which the consumption entails a significant benefit to others (like vaccines)

a and c

In which of the following situations is the market equilibrium most likely to be inefficient? a. The noise from a factory affects the quality of sleep of people living around it b. The byproduct produced by the production of a good has a variety of uses c. The froth released by the factory affects the quality of water in nearby lakes

a and c

The introduction of rent controls could lead to which of the following? Select all that apply a. Discrimination against tenants b. An increase in the quantity of apartments available for rent c. Poorer maintenance of rent controlled apartments

a and c

The introduction of rent controls could lead to which of the following? Select all that apply a. Lower rent for those who live in rent-controlled apartments b. An excess supply of available apartments c. A decrease in quantity of apartments available for rent

a and c

If hot dogs and ketchup are complements, then an increase in price for ketchup will result in ___. All that apply a. A decrease in the price of hotdogs b. An increase in the price of hotdogs c. A decrease in the number of hotdogs bought and sold in the market

a and c a explained: higher price of ketchup >> lower demand of hotdogs >>> lower price of hotdogs

If butter and popcorn are complements, then an increase in price of butter will lead to ___ in demand for popcorn. a. Increase b. Decrease

b

If your cousin gets a big raise at work and, as a result, goes out to eat more often. This suggests that your cousins restaurant meals are a ____ good. a. Complementary b. Inferior c. Substitute d. Normal

d

If people who currently own homes learn that home prices are likely to go up in their area next year, then this should lead to ___ in the current supply of homes. a. An increase b. A Decrease

b

If butter and popcorn are complements, then an increase in the price of popcorn will lead to ___. All that apply a. An increase in the equilibrium quantity of butter b. A decrease in the equilibrium price of butter c. A decrease in the equilibrium quantity of butter d. An increase in the equilibrium price of butter

b and c Price of popcorn increases >> demand for butter decreases >> price of butter decreases

The socially optimal quantity is ___. a. The equilibrium quantity b. Determined by democratically elected governments in most countries c. The quantity of a good that maximizes the total economic surplus that results from producing and consuming the good.

c

You observe that the price of ice cream has increased and that less ice cream is being bought and sold. The best explanation for this is that ___. a. A demand for ice cream has increased b. A demand for ice cream has decreased c. Supply of ice cream has decreased d. Supply of ice cream has increased

c

If bread and peanut butter are compliments, then a decrease in price of peanut butter would lead to ___. All that apply a. A decrease in the amount of bread that people buy b. A decrease in the price of bread c. An increase in the price of bread d. An increase in the amount of bread that people buy.

c and d

Suppose the demand for gas increases at the same time the supply of gas falls, then we know that ___. a. The equilibrium price and quantity will decrease b. The equilibrium price will go up but the equilibrium quantity could go up or down c. The equilibrium quantity of gas will go down but the equilibrium price could go up or down d. The equilibrium price and quantity will increase

b

The demand curve is a schedule or graph that shows ___. a. The amount that buyers must pay sellers to purchase another unit of good b. The quantity of a good that buyers wish to buy at each price c. The quantity of a good that buyers wish to buy at a given point in time

b

The supply curve is a schedule or graph that shows ___. a. The price that sellers must charge in order for buyers to purchase the good b. The quantity of a good that sellers wish to sell at each price c. The quantity of a good that sellers wish to sell at each price

b