Ch.4

Refer to Table 4-1. If D2 and S2 represent the demand and supply schedules in a particular market, then the equilibrium price and quantity are __________ and __________, respectively. Price D 1 D 2 S 1 S 2 $12 5 9 19 14 $10 8 12 17 12 $8 11 15 15 10 $6 13 18 13 8 $4 16 21 11 6 $2 18 24 9 4 $12; 12 $10; 12 $8; 15 $6; 18

$10; 12

Refer to Table 4-1. If D2 and S1 represent the demand and supply schedules in a particular market, then the equilibrium price and quantity are __________ and __________, respectively. Price D 1 D 2 S 1 S 2 $12 5 9 19 14 $10 8 12 17 12 $8 11 15 15 10 $6 13 18 13 8 $4 16 21 11 6 $2 18 24 9 4 $8; 15 $10; 17 $12; 9 $12; 10

$8; 15

Price ceilings, like usury laws, can lead to _________ in capital if set below the equilibrium price or interest rate. A. surpluses, or excess supply B. diminishing marginal utility C. shortage, or excess demand D. diminishing marginal returns

C. shortage, or excess demand

A revolution in the telecommunications industry makes it easier to use automated menu systems in restaurants. Which of the following describes the effect in the restaurant labor market? A. Labor demand shifts to the right. B. Labor supply shifts to the left. C. Labor demand shifts to the left. D. Labor supply shifts to the right.

Labor demand shifts to the left.

Refer to Figure 4-1. The movement from __________ to __________ is consistent with a successful advertising campaign that claims wool keeps you warm. Point A; Point B Point A; Point F Point A; Point D Point A; Point H

Point A; Point F

Refer to Figure 4-1. The movement from __________ to __________ is consistent with a decrease in the price of cotton (a substitute). Point A; Point H Point A; Point D Point A; Point F Point A; Point B

Point A; Point H

What is the effect on equilibrium wage and employment of a rightward shift in labor supply and labor demand? A. The change in wage is indeterminate, while employment increases. B. The wage increases, while employment stays the same. C. The wage increases, while employment goes down. D. The wage increases, while employment also increases.

The change in wage is indeterminate, while employment increases.

Which of the following best describes the effect of an increase in a worker's wages on his demand curve for a normal good? movement along the same demand curve no change a rightward shift of the demand curve a leftward shift of the demand curve

a rightward shift of the demand curve

Which of the following will not result in a leftward shift of the market demand curve for labor? A. a decrease in the firm's product price B. a decrease in labor productivity C. an increase in the wage rate D. a decrease in demand for the firm's product

an increase in the wage rate

In the financial market, higher interest rates _____ the quantity of money borrowed and _____ the quantity of money loaned. A. decrease, increase B. decrease, decrease C. increase, increase D. increase, decrease

decrease, increase

Refer to Table 4-1. Suppose that D1 and S1 are the prevailing demand and supply curves for a product. If the demand schedule changes from D1 to D2, then: Price D 1 D 2 S 1 S 2 $12 5 9 19 14 $10 8 12 17 12 $8 11 15 15 10 $6 13 18 13 8 $4 16 21 11 6 $2 18 24 9 4 equilibrium price decreases from $6 to $4. equilibrium quantity decreases from 15 to 13. equilibrium quantity increases from 13 to 18. equilibrium price increases from $6 to $8

equilibrium price increases from $6 to $8

Refer to Table 4-1. Suppose that D2 and S1 are the prevailing demand and supply curves for a product. If the demand schedule changes from D2 to D1, then: Price D 1 D 2 S 1 S 2 $12 5 9 19 14 $10 8 12 17 12 $8 11 15 15 10 $6 13 18 13 8 $4 16 21 11 6 $2 18 24 9 4 equilibrium price increases from $6 to $8. equilibrium quantity increases from 13 to 18 equilibrium quantity decreases from 15 to 13. equilibrium price decreases from $6 to $4.

equilibrium quantity decreases from 15 to 13. or equilibrium price decreases from $6 to $4.

Equilibrium in the financial market occurs when the quantity of ________ demanded equals the quantity supplied. A. loanable funds B. bank accounts C. stocks and bonds D. money supply

loanable funds

A price ceiling imposed above the equilibrium price will result in _______ in the market. A. excess supply (surplus) B. excess demand (shortage) C. excess returns D. no change

no change

Increased government debt ________ interest rates, making it _______ for businesses to borrow money. A. lowers, cheaper B. raises, more costly C. raises, cheaper D. lowers, more costly

raises, more costly

Price floors like the minimum wage lead to a ________ of workers, which is another way of saying "unemployment". A. equilibrium quantity B. surplus C. equilibrium price D. shortage

surplus