Mod 2 At Home Test

In the labor market, at equilibrium, the quantity supplied and the quantity demanded are unfair are imbalanced are equal will always have an advantage to business

are equal

Which of the following will cause a decrease in market equilibrium price and an increase in equilibrium quantity An increase in supply. A decrease in demand. An increase in demand. A decrease in supply.

An increase in supply.

A headline reads "Perfect Weather Brings Record-High Coffee Harvest." This increase in Supply situation would lead to a(n): Decrease in the price and in the quantity purchased of coffee Decrease in the price and an increase in quantity purchased of coffee Increase in the price and a decrease in the quantity purchased of coffee Increase in the price and in the quantity purchased of coffee

Decrease in the price and an increase in quantity purchased of coffee

A news story states that "DVDs lose their appeal as consumers switch to online streaming for movies." In a competitive market for DVDs, this decrease in Demand situation would lead to a(n): Decrease in the price and the quantity sold of DVDs Increase in the price and the quantity sold of DVDs Increase in the price and a decrease in the quantity sold of DVDs Decrease in the price and an increase in the quantity sold of DVDs

Decrease in the price and the quantity sold of DVDs

If the Demand decreases what happens in the market EQm P and Q both decrease EQm P decreases and EQm Q stays the same EQm P decreases and EQm Q increases EQm P stays same and EQm Q decrease

EQm P and Q both decrease

If the Supply increases what happens in the market? EQm price stays the same; EQm quantity increases EQm price decrease; EQm quantity increases EQm price decrease; EQm quantity stays the same EQm price increases; EQm quantity stays the same

EQm price decrease; EQm quantity increases

Since 1958, the federal government has attempted to make college more affordable by subsidizing student loans. The subsidies have come in the form of lower interest rates, and fewer credit checks. At first glance that assistance appears to be entirely helpful. After all, college tuition costs are now very high after having risen steadily over the last few decades. In just over 40 years average cost of college has gone up by more than 40x. From $2900 to $42,000 in private universities and from $1400 to $19000 in public universities. It MAY seem obvious that student loans have helped students keep up with the raising cost of college. Why are costs rising though? Is it outside forces like new building, higher wages and other costs or something else? The old (but incorrect) belief is that the increases in the price of college (tuition, books, etc) has caused an increase in the demand for student loans. Question: True or False: An increase in the price of a good cause an increase in the demand? True False

False

Since 1958, the federal government has attempted to make college more affordable by subsidizing student loans. The subsidies have come in the form of lower interest rates, and fewer credit checks. At first glance that assistance appears to be entirely helpful. After all, college tuition costs are now very high after having risen steadily over the last few decades. In just over 40 years average cost of college has gone up by more than 40x. From $2900 to $42,000 in private universities and from $1400 to $19000 in public universities. It MAY seem obvious that student loans have helped students keep up with the raising cost of college. Why are costs rising though? Is it outside forces like new building, higher wages and other costs or something else? The old (but incorrect) belief is that the increases in the price of college (tuition, books, etc) has caused an increase in the demand for student loans. Question: True or False: An increase in the price of a good cause an increase in the supply? True False

False

Which is of the following statements is correct? If price increases, then demand will decrease If demand decreases, then price will decrease If price decreases, then demand will decrease If demand increases, then price will decrease

If demand decreases, then price will decrease

A headline reads "Lumber Prices Up Sharply." In a competitive market, this situation would lead to a decrease in the Supply of new homes and a(n): Increase in the price of new homes and decrease in quantity Increase in the price and quantity of new homes Decrease in the price of new homes and increase in quantity Decrease in the price and quantity of new homes

Increase in the price of new homes and decrease in quantity

Illegal drugs: Generally if society feels that illegal drugs are bad, and the Government is trying to lower the amount of drugs bought and sold in the market there are a couple of ways to do it. (in terms of the market for these drugs) Currently the Government mainly focus's on the sellers. Thus the Government is lowering the supply causing a decrease in quantity but an increase in price. The price a seller receives is the MB of selling drugs. Question: If you raise the MB of selling drugs due to the higher price, what might happen as an unintended consequence? cooperation of sellers More violence and drug gangs protect their sales more buyers buying more drugs Less violence

More violence and drug gangs protect their sales

If the price of a good changes (and only the price) then what will happen No change in demand, and no change in supply Demand increases supply increases Demand decreases, Supply increase Demand decreases, Supply decreases

No change in demand, and no change in supply

Which of the following would be expected if the tariff on foreign-produced automobiles were increased (that would cause the supply of foreign cars to decrease)? The number of unemployed workers in the domestic automobile industry would rise. The demand for foreign-produced automobiles would increase, causing the price of automobiles to increase in other nations. The supply of foreign automobiles to the domestic market would be reduced, causing auto prices to rise. The domestic price of automobiles would fall

The supply of foreign automobiles to the domestic market would be reduced, causing auto prices to rise.

PLAYOFF HOCKEY The Florida Everblades (the local professional hockey team) is currently in the playoffs. In the first round only about 4000 people came to the games. In the second round 5000 people started coming but the ticket prices went up between rounds be a little. If the Blades make it all the way to the finals it is expected sellouts and the ticket prices will be very high. If that happens what likely occur. (sellouts mean more people want to come to the game but can't find a ticket from the team to buy at the price the team is charging.) a black market will thrive The Blades are making the most ticket revenue possible The opposing team will give up The Blades will lower the prices to sell more seats

a black market will thrive

Illegal drugs: Generally if society feels that illegal drugs are bad, and the Government is trying to lower the amount of drugs bought and sold in the market there are a couple of ways to do it. (in terms of the market for these drugs) Currently the Government mainly focus's on the sellers. Thus the Government is lowering the supply causing a decrease in quantity but an increase in price. The price a seller receives is the MB of selling drugs. This can cause a very high rate of very violent crime. Question: What will reduce quantity and reduce price too increase supply decrease demand legalize all drugs and place a price floor on the price increase demand

decrease demand

With a downsloping demand curve and an upsloping supply curve for a product, a decrease in resource prices (increasing the supply) will: decrease equilibrium price and increase equilibrium quantity. increase equilibrium price and quantity. decrease equilibrium price and quantity. increase equilibrium price and decrease equilibrium quantity.

decrease equilibrium price and increase equilibrium quantity.

Environmental green tech: Subsidies have been applied to many green technologies in an attempt to promote a cleaner environment. A subsidy will increase the supply of that good. Question: The situation is that the cost of production is so high that the price of green energy is very high and the quantity that people want to buy at that high price is to low. What will a subsidy in the production of green energy do to the green energy market to "fix" the problem? increase price decrease price increase demand decrease demand

decrease price

Environmental green tech: Subsidies have been applied to many green technologies in an attempt to promote a cleaner environment. Subsidies are given to specific companies and specific industries like ethanol (combining corn and gasoline), solar power, and wind power. What happens to green energies that do not get the subsidy (like nuclear, wave power and others). For example solar power gets government subsidies the price is lowered. That causes the demand for Nuclear to decrease. Question: What happens in the market for Nuclear (and the other clean energies) decrease price; decrease quantity decrease price increase quantity increase price; increase quantity increase price; decrease quantity

decrease price; decrease quantity

The _______________ is the quantity where quantity demanded and quantity supplied are equal at a certain price. quantity demanded equilibrium quantity demand schedule supply schedule

equilibrium quantity

A price ceiling: is the lowest price that one can legally pay for some good or service. example is rent controls example is the minimum wage Creates a surplus

example is rent controls

A price floor: example is rent controls is a legal maximum price that one pays for some good or service. example is the minimum wage creates a shortage

example is the minimum wage

A price floor means that: government is imposing a minimum legal price that is typically above the equilibrium price. government is imposing a maximum legal price that is typically below the equilibrium price. inflation is severe in this particular market.

government is imposing a minimum legal price that is typically above the equilibrium price.

ntl trade If the government raises the tariff on steel, this will decrease the total supply of steel in the US and raise the price of steel in the US. This will have an effect in the markets for goods that buy steel to produce their goods, (like the US auto industry). In the auto industry, this higher price for steel causes the supply of US made autos to decrease. What affect does this have on the market for US made autos? lower price; higher quantity higher price; higher quantity lower price; lower quantity higher price; lower quantity

higher price; lower quantity

Suppose that as the demand for nurses increases, the supply shrinks due to an increasing number of nurses entering retirement and increases in the tuition of nursing degrees. The decrease of the supply captures the impact of a decreasing supply of nurses. The shifts in both demand and supply leads to: nurses are always under paid lower wages for nurses higher wages for nurses unclear on any change in wages

higher wages for nurses

Intl trade If the government raises the tariff on steel, this will increase the demand for domestic steel production. This will increase the demand for steel workers in the US and do what to wages and the number of jobs in the US steel industry? lower wages; more jobs lower wages; few jobs higher wages; more jobs higher wages; few jobs

higher wages; more jobs

With a downsloping demand curve and an upsloping supply curve for a product, placing an excise tax on this product (decreasing the supply) will: increase equilibrium price and decrease equilibrium quantity. increase equilibrium price and quantity. decrease equilibrium price and quantity. decrease equilibrium price and increase equilibrium quantity.

increase equilibrium price and decrease equilibrium quantity.

PLAYOFF HOCKEY The Florida Everblades (the local professional hockey team) is currently in the playoffs. In the first round only about 4000 people came to the games. In the second round 5000 people started coming but the ticket prices went up between rounds be a little. What must have happened? decrease in demand for seats increase in demand for seats (the further they go the more people show) increase in supply for seats decrease in supply for seats

increase in demand for seats

Other things equal, an excise tax on a product (decreasing the supply of the good) will: increase its demand. increase the quantity sold. increase its supply. increase its price.

increase its price.

What will happen to the price and quantity of Japanese goods in the US if the dollar depreciates causing the costs of producing Japanese goods to increase resulting in a decrease in the SUPPLY of Japanese goods nothing to price, increase quantity increase price, decrease quantity decrease price, increase quantity increase price, nothing to quantity

increase price, decrease quantity

What will happen to the price and quantity of a Government bond if the Fed takes action to increase the DEMAND for government bonds? increase price, nothing to quantity decrease price, increase quantity increase price, increase quantity increase price, decrease quantity

increase price, increase quantity

Illegal drugs: Generally if society feels that illegal drugs are bad, and the Government is trying to lower the amount of drugs bought and sold in the market there are a couple of ways to do it. (in terms of the market for these drugs) Currently the Government mainly focus's on the sellers. Thus the Government is lowering the supply Question: What does this targeting of the sellers and lowering supply do in the market? lower price; lower quantity lower price; raise quantity increase price; raise quantity increase price; lower quantity

increase price; lower quantity

The effect of medical insurance is to: move downward and to the left along the supply curve for a covered procedure increase the quantity demand for covered procedures decrease the supply of covered procedures reduce the total number of the procedures provided

increase the quantity demand for covered procedures

Improvements in the productivity of labor (so increasing the demand for labor) will tend to: decrease the supply of labor. increase the supply of labor. increase wages. decrease wages.

increase wages.

Price floors and ceiling prices: interfere with the rationing function of prices. cause the supply and demand curves to shift until equilibrium is established. both cause surpluses. both cause shortages.

interfere with the rationing function of prices.

A market: entails the exchange of goods, but not services. reflects upsloping demand and downsloping supply curves. always requires face-to-face contact between buyer and seller. is an institution that brings together buyers and sellers.

is an institution that brings together buyers and sellers.

Other things being equal, a _____________ supply of workers tends to _________ real wages. smaller; not change smaller; decrease larger; decrease larger; increase

larger; decrease

Economic events can change the equilibrium salary (or wage) and quantity of labor. Consider how the wave of new information technologies, like computer and telecommunications networks, has affected low-skill and high-skill workers in the U.S. economy. From the perspective of employers who demand labor, these new technologies are often a substitute for low-skill laborers like file clerks who used to keep file cabinets full of paper records of transactions. However, the same new technologies are a complement to high-skill workers like managers, who benefit from the technological advances by having the ability to monitor more information, communicate more easily, and juggle a wider array of responsibilities. How will the new technologies affect the wages of high-skill and low-skill workers? Demand for low skill workers will decrease, Demand for high skilled workers increase, so low skill wages increase; high skill wages increase low skill wages decrease; high skill wages decrease low skill wages increase; high skill wages decrease low skill wages decrease; high skill wages increase

low skill wages decrease; high skill wages increase

Illegal drugs: Generally if society feels that illegal drugs are bad, what goal should the Government be trying to reach? (in terms of the market for these drugs) higher price lower quantity lower price higher quantity

lower quantity

Intl trade If the government raises the tariff on steel, this will decrease the total supply of steel in the US and raise the price of steel in the US. In the auto industry, this higher price for steel causes the supply of US made autos to decrease which causes the US auto makers to sell fewer US cars. This means they need fewer US auto worker. If the demand for auto workers decreases what does this do to the wages and number of US auto worker jobs? higher wages; more jobs lower wages; more jobs higher wages; fewer jobs lower wages; fewer jobs

lower wages; fewer jobs

The equilibrium price and quantity in a market usually produce allocative efficiency because: equilibrium ensures an equitable distribution of output. marginal benefit and marginal cost are equal at that point. all consumers who want the good are satisfied. the excess of goods produced at equilibrium guarantees that all will have enough.

marginal benefit and marginal cost are equal at that point.

Most economists who have studied the health care industry have concluded that resources in the U.S. are likely: overallocated to health care; marginal costs exceed marginal benefits underallocated to health care; marginal costs exceed marginal benefits underallocated to health care; marginal benefits exceed marginal costs overallocated to health care; marginal benefits exceed marginal costs

overallocated to health care; marginal costs exceed marginal benefits

Studies of the U.S. deregulation of the airline, trucking, and rail freight industries (which has increased the number of sellers and increased the Supply in these areas) have revealed that: these industries have "remonopolized" as firms have either merged or gone out of business prices have dropped by one third to one half, adjusted for inflation industry output has decreased, adjusted for population growth deregulation ultimately harms consumers

prices have dropped by one third to one half, adjusted for inflation

What is true of the equilibrium quantity quantity demanded is greater the quantity supplied quantity demanded equals the quantity supplied quantity demanded is less that the quantity supplied quantity demanded is more important than the quantity supplied

quantity demanded equals the quantity supplied

Intl trade If the government raises the tariff on steel, this will decrease the total supply of steel in the US? (although US steel makers make more overall there is a decrease in total supply of steel in the US.) What will this do in the market for steel? lower price; raise quantity raise price; lower quantity lower price; lower quantity raise price; raise quantity

raise price; lower quantity

PLAYOFF HOCKEY The Florida Everblades (the local professional hockey team) is currently in the playoffs. In the first round only about 4000 people came to the games. In the second round 5000 people started coming but the ticket prices went up between rounds be a little. If the Blades make it all the way to the finals it is expected sellouts and the ticket prices will be very high. If the games do sellout, how could the Blades actually make more money? lower ticket prices to sell more seats raising the ticket prices higher lower the parking prices have give aways of tickets to draw interest in the team

raising the ticket prices higher

An effective ceiling price will: clear the market. result in a product shortage. result in a product surplus. induce new firms to enter the industry.

result in a product shortage.

Data from the registrar's office at Gigantic State University indicate that over the past 20 years tuition and enrollment have both increased. From this information we can conclude that: GSU's supply curve of education is downsloping. school-age population, incomes, and preferences for education have changed over the 20-year period all of which would increase demand. higher education is an exception to the law of demand. the supply of education provided by GSU has also increased over the 20-year period.

school-age population, incomes, and preferences for education have changed over the 20-year period all of which would increase demand.

Suppose that in 2007, Ford sold 500,000 Mustangs at an average price of $18,800 per car; in 2008, 600,000 Mustangs were sold at an average price of $19,500 per car. These statements: suggest that the demand for Mustangs decreased between 2007 and 2008. suggest that the supply of Mustangs must have increased between 2007 and 2008. constitute an exception to the law of demand in that they suggest an upsloping demand curve. suggest that the demand for Mustangs increased between 2007 and 2008.

suggest that the demand for Mustangs increased between 2007 and 2008.

Since their introduction, prices of Blu-ray players have fallen and the quantity purchased has increased. This statement: suggests that the supply of Blu-ray players has increased. suggests that the demand for Blu-ray players has increased. constitutes an exception to the law of supply in that they suggest a downward-sloping supply curve. constitutes an exception to the law of demand in that they suggest an upward-sloping demand curve.

suggests that the supply of Blu-ray players has increased.

Allocative efficiency refers to: the production of the product mix most wanted by society. the full employment of all available resources. production at some point inside of the production possibilities curve. the use of the newest method of production.

the production of the product mix most wanted by society.