Question 1

An effective price floor is set _____ the equilibrium price and causes a _____.

Accepted Answer

A)   above; surplus
B)   below; shortage
C)   above; shortage
D)   below; surplusE) C) and D)
F) A) and B)

Question 2

Which of the following would NOT cause the equilibrium price to increase and the equilibrium quantity to decrease in the market for bacon pasta?

Accepted Answer

A)   Firms expect lower prices in the future.
B)   The cost of bacon, an input to producing bacon pasta, increases.
C)   The number of firms producing bacon pasta decreases.
D)   The price of a substitute in production increases.E) A) and B)
F) A) and D)

Question 3

The price in a market is currently higher than the equilibrium price, and as a result, there is deadweight loss in this market. What caused this?

Accepted Answer

A)   a price ceiling
B)   a price floor
C)   an increase in supply
D)   an increase in demandE) A) and C)
F) B) and C)

Question 4

Use Table: The Market for Sunglasses. What is the equilibrium quantity in this market? What happens if a price floor of $40 is imposed on this market? Explain why this causes a deadweight loss.
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Accepted Answer

The equilibrium price is $20, and the eq...

Question 5

Who ostensibly benefits from a price ceiling? Who ostensibly benefits from a price floor? Explain.

Accepted Answer

Buyers of a good or service typically be...

Question 6

A _____ occurs when the price of a good is higher than the equilibrium price, and a _____ occurs when the price of a good is lower than the equilibrium price.

Accepted Answer

A)   equilibrium; shortage
B)   shortage; surplus
C)   surplus; shortage
D)   surplus; equilibriumE) C) and D)
F) B) and C)

Question 7

A new gaming controller was released at a price of $65. The quantity of gaming controllers supplied is higher than the quantity of gaming controllers demanded at this price. What is true about the market for gaming headsets?

Accepted Answer

A)   It is in equilibrium.
B)   There is a shortage.
C)   There is a surplus.
D)   The price of gaming headsets will not change.E) All of the above
F) C) and D)

Question 8

How do the price and quantity change for a lawn chairs if the price of outdoor sofas, a substitute in consumption to lawn chairs, increases?

Accepted Answer

A)   Price increases, and quantity decreases.
B)   Price decreases, and quantity increases.
C)   Price decreases, and quantity decreases.
D)   Price increases, and quantity increases.E) C) and D)
F) None of the above

Question 9

Use Table: Supply and Demand Schedule for Walking Tours. What would be an effective price ceiling in this market, and how much would be sold?

Accepted Answer

A)   The price is $10, and 70 would be sold.
B)   The price is $30, and 80 would be sold.
C)   The price is $20, and 50 would be sold.
D)   The price is $10, and 90 would be sold.E) B) and C)
F) A) and D)

Question 10

How do the price and quantity change for a good if the cost of producing the good increases?

Accepted Answer

A)   Price increases, and quantity increases.
B)   Price increases, and quantity decreases.
C)   Price decreases, and quantity increases.
D)   Price decreases, and quantity decreases.E) B) and D)
F) B) and C)

Question 11

The equilibrium price is the price that:

Accepted Answer

A)   makes buyers the happiest.
B)   makes the quantity supplied equal to the quantity demanded.
C)   generates the largest surplus in a market.
D)   generates the smallest surplus in a market.E) A) and C)
F) B) and C)

Question 12

Use Figure: The Market for Sandwiches II. What does the shaded area in this graph represent?
​
Figure: The Market for Sandwiches II

Accepted Answer

A)   consumer surplus
B)   deadweight loss
C)   surplus
D)   producer surplusE) B) and C)
F) A) and D)

Question 13

When a market has reached the equilibrium quantity, the:

Accepted Answer

A)   highest price that consumers are willing to pay is equal to the lowest price that sellers are willing to accept.
B)   price received by consumers is higher than the price paid by sellers.
C)   price paid by consumers is lower than the price received by sellers.
D)   lowest price that consumers are willing to pay is equal to the highest price that sellers are willing to accept.E) None of the above
F) C) and D)

Question 14

_____ is an artificial lower bound on the price of a good or service.

Accepted Answer

A)   A price ceiling
B)   A price floor
C)   An equilibrium point
D)   A deadweight lossE) A) and B)
F) A) and C)

Question 15

_____ is an artificial upward limit on the price of a good or service.

Accepted Answer

A)   A price floor
B)   A price ceiling
C)   A surplus
D)   An equilibriumE) C) and D)
F) A) and D)

Question 16

The _____ is where the supply curve and the demand curve intersect.

Accepted Answer

A)   equilibrium point
B)   vertical axis
C)   horizontal axis
D)   surplusE) B) and D)
F) None of the above

Question 17

The consumer and producer surplus that is lost when an inefficient quantity is sold is called:

Accepted Answer

A)   deadpan surplus.
B)   deadweight loss.
C)   shortages.
D)   surpluses.E) B) and C)
F) None of the above

Question 18

A _____ market is an illegal market.

Accepted Answer

A)   white
B)   black
C)   gray
D)   yellowE) B) and C)
F) A) and D)

Question 19

Use Table: Supply and Demand Schedule for Walking Tours. What price would NOT cause deadweight loss in this market?
​

Accepted Answer

A)   $20
B)   $30
C)   $40
D)   $50E) A) and D)
F) None of the above

Question 20

Use Table: Supply and Demand Schedule for Walking Tours. What is the new equilibrium price and quantity in this market if at every price 30 fewer walking tours are demanded?
​

Accepted Answer

A)   Price is $30, and quantity is 40.
B)   Price is $20, and quantity is 50.
C)   Price is $60, and quantity is 40.
D)   Price is $10, and quantity is 30.E) B) and C)
F) B) and D)

Exam 5: Market Equilibrium

The consumer and producer surplus that is lost when an inefficient quantity is sold is called:

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When a market has reached the equilibrium quantity, the:

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The price in a market is currently higher than the equilibrium price, and as a result, there is deadweight loss in this market. What caused this?

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Use Table: Supply and Demand Schedule for Walking Tours. What would be an effective price ceiling in this market, and how much would be sold?

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A _____ market is an illegal market.

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Use Table: Supply and Demand Schedule for Walking Tours. What price would NOT cause deadweight loss in this market? ​

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Use Figure: The Market for Sandwiches II. What does the shaded area in this graph represent? ​ Figure: The Market for Sandwiches II

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The equilibrium price is the price that:

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An effective price floor is set _____ the equilibrium price and causes a _____.

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How do the price and quantity change for a good if the cost of producing the good increases?

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A _____ occurs when the price of a good is higher than the equilibrium price, and a _____ occurs when the price of a good is lower than the equilibrium price.

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Who ostensibly benefits from a price ceiling? Who ostensibly benefits from a price floor? Explain.

Correct AnswerverifiedBuyers of a good or service typically be...View AnswerShow Answer

_____ is an artificial lower bound on the price of a good or service.

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_____ is an artificial upward limit on the price of a good or service.

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Which of the following would NOT cause the equilibrium price to increase and the equilibrium quantity to decrease in the market for bacon pasta?

Correct AnswerverifiedShow Answer

How do the price and quantity change for a lawn chairs if the price of outdoor sofas, a substitute in consumption to lawn chairs, increases?

Correct AnswerverifiedShow Answer

Use Table: The Market for Sunglasses. What is the equilibrium quantity in this market? What happens if a price floor of $40 is imposed on this market? Explain why this causes a deadweight loss. ​ ​

Correct AnswerverifiedThe equilibrium price is $20, and the eq...View AnswerShow Answer

The _____ is where the supply curve and the demand curve intersect.

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A new gaming controller was released at a price of $65. The quantity of gaming controllers supplied is higher than the quantity of gaming controllers demanded at this price. What is true about the market for gaming headsets?

Correct AnswerverifiedShow Answer

Use Table: Supply and Demand Schedule for Walking Tours. What is the new equilibrium price and quantity in this market if at every price 30 fewer walking tours are demanded? ​

Correct AnswerverifiedShow Answer

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Use Table: Supply and Demand Schedule for Walking Tours. What price would NOT cause deadweight loss in this market?

Correct Answer
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Use Figure: The Market for Sandwiches II. What does the shaded area in this graph represent? Figure: The Market for Sandwiches II

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Correct Answer
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An effective price floor is set _ the equilibrium price and causes a _.

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Correct Answer
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A _ occurs when the price of a good is higher than the equilibrium price, and a _ occurs when the price of a good is lower than the equilibrium price.

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Correct Answer
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Buyers of a good or service typically be...
View Answer

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Correct Answer
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Correct Answer
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Use Table: The Market for Sunglasses. What is the equilibrium quantity in this market? What happens if a price floor of $40 is imposed on this market? Explain why this causes a deadweight loss.

Correct Answer
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The equilibrium price is $20, and the eq...
View Answer

Correct Answer
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Correct Answer
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Use Table: Supply and Demand Schedule for Walking Tours. What is the new equilibrium price and quantity in this market if at every price 30 fewer walking tours are demanded?

Correct Answer
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