Demand and Supply, Part 3- Quiz

What has been the market outcome of government-enforced price floors for agricultural products? A. Not enough food has been produced. B. Farmers have been made worse off. C. A shortage of agricultural products has resulted. D. A surplus of agricultural products has resulted.

D. A surplus of agricultural products has resulted

Which of the answer choices best describes a situation involving a third-party market? A. A patient pays an insurance copay of $5 for a doctor's visit that costs $150. B. An airline traveler gets a stand-by ticket on Delta Airlines for $2,000, when a non-stand-by passenger paid $500 for the same flight. C. A gold speculator purchases 100 ounces of gold on a belief that gold prices will increase in two months. D. A customer uses a Publix coupon to save $1 on a bottle of Publix-brand mouthwash.

A. A Patient pays an insurance copay of $5 for a doctor's visit that costs $150

Which of the answer choices would likely result as a consequence of rent controls? A. All of the below are correct. B. A reduction in the rate of construction of rental housing units. C. Unimproved buildings and apartment complexes. D. Limits on tenant mobility.

A. All of the below are correct

If a binding price ceiling is imposed on the computer market, then _____. A. All of the following answer choices are correct. B. the quantity of computers supplied will decrease C. a shortage of computers will develop D. the quantity of computers demanded will increase

A. All of the following answer choices are correct

A price ceiling represents a _____. A. maximum price that can be legally charged for a good or service B. minimum price that can be legally charged for a good or service C. lottery imposed upon producers by the government D. first come, first served mechanism for controlling prices

A. Maximum price that can be legally charged for a good or service

Between July 2010 and June 2012, the United States imposed tariffs on steel imports. These tariffs were _____. A. taxes on steel imports, which decreased the supply of imported steel and increased its market price B. subsidies for domestic steel, which decreased supply of domestic steel and decreased its market price C. taxes on steel imports, which increased the supply of imported steel and increased its market price D. a subsidy on all domestic goods, which increased their supplies and decreased their market prices

A. Taxes on steel imports, which decreased the supply of imported steel and increased its market price

A binding government imposed price floor will result in _____. A. a surplus on the market B. a shortage on the market C. additional revenue for the government D. prices for the product decreasing in the future

A. a surplus in the market

After the introduction of a quota on imported goods, it is expected that _____. A. profits of foreign manufactures will rise B. sales of the foreign good in the domestic market will rise C. revenue to the domestic government from the sale of the foreign good in the domestic market will rise D. sales of the similar domestic good will decline

A. profits of foreign manufacturers will rise

A portion of a hypothetical newspaper article recounting the events surrounding a hurricane that hit the Central Florida area appears below. "Before the arrival of Hurricane Zelda, normal market operations of gasoline were evident. However, after the hurricane hit the area, local governments imposed price ceilings on gasoline. After three weeks of shortages with their long lines at the gas pumps, local governments removed the price ceilings and the gasoline market began to return to normal." Assuming that demand and supply did not change, which of the answer choices best describes the price of gasoline (1) before the hurricane, (2) just after the hurricane when price ceilings were imposed, and (3) after the removal of price ceilings? A. $3.25, $4.25, $3.25 B. $2.50, $1.75, $2.00 C. $3.00, $2.50, $2.25 D. $2.75, $3.00, $2.50

B. $2.50, $1.75, $2.00

What would happen in the market for rental housing if the local government legally mandated rents that were below the current market price? A. There would be a surplus of rental housing. B. There would be a shortage of rental housing. C. The demand for rental housing would increase. D. The supply of rental housing would decrease.

B. There would be a shortage of rental housing

A binding government imposed price ceiling will result in _____. A. a surplus on the market B. a shortage on the market C. additional revenue for the government D. prices for the product decreasing in the future

B. a shortage in the market

A price floor is binding when it is set _____. A. above the equilibrium price, causing a shortage B. above the equilibrium price, causing a surplus C. below the equilibrium price, causing a shortage D. below the equilibrium price, causing a surplus

B. above the equilibrium price, causing a surplus

If the government removes a binding price floor from a market, then the price received by sellers will _____. A. decrease and the quantity transacted in the market will decrease B. decrease and the quantity transacted in the market will increase C. increase and the quantity transacted in the market will decrease D. increase and the quantity transacted in the market will increase

B. decrease and the quantity transacted in the market will increase

Tariffs allow _____. A. foreign producers to receive a higher price B. domestic producers to receive a higher price C. foreign producers to charge a lower price D. domestic producers to charge a lower price

B. domestic producers to receive a higher price

A price floor represents a _____. A. maximum price that can be legally charged for a good or service B. minimum price that can be legally charged for a good or service C. lottery imposed upon producers by the government D. first come, first served mechanism for controlling prices

B. minimum price that can be legally charged for a good or service

If the Federal government sets a minimum price for wheat at $5.00 per bushel when the equilibrium price is $4.50, then a _____. A. surplus will be created causing the price to decrease to the equilibrium price of $4.50 B. permanent surplus will develop because the government established the minimum price at $5.00 C. shortage will be created causing the price to increase to the equilibrium price of $4.50 D. permanent shortage will develop because the government established the minimum price at $5.00

B. permanent surplus will develop because the government established the minimum price at $5.00

The effect of a minimum wage law set above the equilibrium wage rate is a(n) _____. A. excess of labor demanded B. excess of labor supplied C. increase in the quantity of labor demanded D. decrease in the quantity of labor supplied

B.excess of labor supplied

You have responsibility for economic policy in the country of Freedonia. Recently, the neighboring country of Sylvania has cut off all exports of oranges to Freedonia. Harpo, who is one of your advisors, suggests that you should impose a binding price ceiling in order to avoid a shortage of oranges. Chico, another one of your advisors, argues that without a binding price floor, a shortage will certainly develop. Zeppo, a third advisor, says that the best way to avoid a shortage of oranges is to take no action at all. Which of your three advisors is most likely to have studied economics? A. Harpo B. Chico C. Zeppo D. Apparently, all three advisors have studied economics, but their views on positive economics are different.

C. Zeppo

If a binding price floor is imposed on the video game market, then _____. A. All of the following answer choices are correct. B. the supply of video games will increase C. a surplus of video games will develop D. the demand for video games will decrease

C. a surplus of video games will develop

Quotas (aka quantity restrictions) benefit which group the most? A. Consumers B. Suppliers wanting to enter the market C. Existing suppliers D. Government

C. existing suppliers 28. B Swiss chocolate 29. C. French wine and Russian Caviar 30. $0

If a price floor is a binding constraint on a market, then _____. A. the equilibrium price must be above the price floor B. the quantity demanded must exceed the quantity supplied C. sellers cannot sell all they want to sell at the price floor D. buyers cannot buy all they want to buy at the price floor

C. sellers cannot sell all they want to sell at the price floor

When the government decreases a price floor for a product the _____. A. shortage in the market will be decreased B. shortage in the market will be increased C. surplus in the market will be decreased D. surplus in the market will be increased

C. surplus in the market will be decreased

In a third-party-payer system ____. A. the person who chooses the product pays the entire cost B. the quantity demanded of the product is lower than it otherwise would be C. the quantity demanded of the product is higher than it otherwise would be D. consumers are hurt

C. the quantity demanded of the product is higher than it otherwise would be

Which of the following observations would be consistent with the imposition of a binding price ceiling on a market? A. All of the following answer are correct. B. A smaller quantity of the good is demanded after the price ceiling becomes effective. C. A larger quantity of the good is supplied after the price ceiling becomes effective. D. A smaller quantity of the good is bought and sold after the price ceiling becomes effective.

D. A smaller quantity of the good is bought and sold after the price ceilling becomes effective

Which of the following is the most likely explanation for the imposition of a price floor on the market for corn? A. Policymakers have studied the effects of the price floor carefully, and they recognize that the price floor is advantageous for society as a whole. B. Buyers and sellers of corn have agreed that the price floor is good for both of them and have therefore pressured policy makers into imposing the price floor. C. Buyers of corn, recognizing that the price floor is good for them, have pressured policymakers into imposing the price floor. D. Sellers of corn, recognizing that the price floor is good for them, have pressured policymakers into imposing the price floor.

D. Sellers of corn, recognizing that the price floor is good for them, have pressured policymakers into imposing the price floor

When a country imposes a quota on foreign goods _____. A. the domestic price of the imported good increases, but domestic consumption remains unchanged B. domestic consumption of the imported good decreases, but the domestic price of the imported good remains unchanged C. domestic production of the good decreases D. domestic consumption of the imported good decreases as the domestic price of the imported good increases

D. domestic consumption of the imported good decreases as the domestic price of the imported good increases

If the government removes a binding price ceiling from a market, then the price received by sellers will _____. A. decrease and the quantity transacted in the market will decrease B. decrease and the quantity transacted in the market will increase C. increase and the quantity transacted in the market will decrease D. increase and the quantity transacted in the market will increase

D. increase and the quantity transacted in the market will increase

When a government removes a price ceiling for a product the _____. A. surplus in the market will be increased B. surplus in the market will be decreased C. shortage in the market will be increased D. shortage in the market will be decreased

D. shortage in the market will be decreased

When a tariff is imposed on an imported good _____. A. the domestic price of the imported good increases while quantity does not change B. domestic consumption of the imported good decreases while price does not change C. domestic production of the good decreases D. the domestic price of the imported good increases and quantity consumed decreases

D. the domestic price of the imported good increases and quantity consumed decreases