Chapter 4 Econ

Refer to the figure below. If the government set a price ceiling of $40, there would be: 24 units sold. 28 units sold. 16 units sold. 12 units sold.

16 units sold

Refer to the figure below. If the government sets a price ceiling of $6, there would be an excess supply of 6 units. There would be a shortage of 4 units. there would be a shortage of 14 units. consumers would demand 14 units.

Consumers would demand 14 units

A price floor attempts to keep prices ________. higher than the equilibrium price. lower than the equilibrium price. at the equilibrium price. Constantly adjusting to quickly reach equilibrium

Higher than equilibrium price

________ are generally the result of price ceilings. Equilibrium quantity Excess supply Shortages Price equilibrium

Shortages

Consider the market for purple potatoes below and assume that a price ceiling of $30 is imposed by the government. Calculate the deadweight loss: The deadweight loss is $2000. The deadweight loss is $2500. The deadweight loss is $10,000. The deadweight loss is $5000.

The deadweight loss is $5000.

Advances in tax software such as TurboTax influenced the income tax preparer market in the following way: - The demand for income tax preparers (the person who calculates and prepares your income tax return) fell and as a result, the wages for tax preparer has increased - The demand for income tax preparers (the person who calculates and prepares your income tax return) rose and as a result, the wages for tax preparer has increased - The supply for income tax preparers (the person who calculates and prepares your income tax return) fell and as a result, there are fewer tax preparer jobs. - The demand for income tax preparers (the person who calculates and prepares your income tax return) fell and as a result, there are fewer tax preparer jobs.

The demand for income tax preparers (the person who calculates and prepares your income tax return) fell and as a result, there are fewer tax preparer jobs.

What effect over the last decade, has the increasingly efficient and inexpensive technology of online college courses had on the college textbook market? The demand for textbook has increased as well as the supply. The supply for college textbooks has increased as a result there are fewer textbook publishing companies. The demand for textbooks has declined resulting in publishing companies increasing their demand of textbook editor jobs. The demand for physical textbooks have steadily decreased, and as a result more publishing companies are having less demand for high skilled textbook editor jobs.

The demand for physical textbooks have steadily decreased, and as a result more publishing companies are having less demand for high skilled textbook editor jobs.

________ is considered the marketspace that bring lenders and borrowers together. The GDP Deflator market A financial product A financial incentives The financial market

The financial market

Assume that currently banks pay 2% interest on money that customers deposit in savings accounts. As the overall amount of money held in savings accounts increases, in financial markets The demand for savings increases. Both supply and demand are increasing. The supply of savings decreases. The supply of savings increases.

The supply of savings increases.

Alabama this winter was socked in with snow which closed highways, stores and schools for weeks. Because of the road closures, soup was in greater demand but short on supply. The government put a temporary price ceiling on the cost of soup at $1. If the equilibrium for soup was at $5, what do you think happened? The market would be more efficient with the price ceiling. The equilibrium price dropped to the price ceiling and the supply met the demanded quantity. People continued to uphold the law and pay the $1 for soup and there was greater quantity supplied than demanded. There was greater demand than supplied and people began a black market for selling and delivering soup.

There was greater demand than supplied and people began a black market for selling and delivering soup.

A price floor when it is set ________ the equilibrium price creates ________. above; excess demand above; excess supply below; excess supply below; excess demand

above; excess supply

After earthquakes hit the California coast and damaged tens of thousands of cars, there was a growing demand and need for automotive repair, glass replacement, dent repair and repainting. In the labor market for car repair, the demand would be represented by body shop workers looking for work and supply is represented by the automotive body shops and glass repair companies providing jobs. automotive body shops and glass repair and replacement companies, and supply represented by the automotive workers car owners wanting car repairs and supply represented by automotive and glass repair and replacement companies. Car buyers and the supply by car workers

automotive body shops and glass repair and replacement companies, and supply represented by the automotive workers

In a market with an upward sloping supply curve and a downward sloping demand curve, a price floor ________. does not affect surplus Increases consumer surplus creates deadweight loss increases total social surplus

creates deadweight loss

The law of demand in the loanable funds market predicts a fall in consumer credit card use if the interest rate falls. decrease in credit card issuance if the interest rate rises. a change in the law of supply. fall in consumer credit card use if the interest rate rises.

fall in consumer credit card use if the interest rate rises.

If the government sets floor prices for wheat or corn that guarantee farmers an above-market price for that product, the most probable result would be what? the market would suffer shortages. overproduction. A black market for wheat and corn. more suppliers would leave the market.

overproduction