Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
362.
In a market with supply and demand curves as shown above, a price ceiling of $2.50 will result
in
363.
Refer to the market graph shown above. A black market where the price is $2.00 could result
from a price
364.
Consider the supply and demand curves depicted in the diagram above. If the government
imposed a price ceiling of $15, then buyers will be intending to buy , but they will be able to
legally buy .
3-184
365.
Consider the supply and demand curves depicted in the diagram above. If the government
imposed a price ceiling of $15, then sellers will be willing to sell , and a black market could
develop where the price would be .
366. Answer the question based on the following supply and demand schedules in units per
week for a product.
Price
Quantity Demanded
Quantity Supplied
$60
100
400
50
140
340
40
180
280
30
220
220
20
260
160
10
300
100
If the government introduced a guaranteed price floor of $40 and agreed to purchase surplus
output, then the government's total support payments to producers would be
367. Answer the question based on the following supply and demand schedules in units per
week for a product.
Price
Quantity Demanded
Quantity Supplied
$60
100
400
50
140
340
40
180
280
30
220
220
20
260
160
10
300
100
Refer to the above table. If demand increased by 100 units at each price level and the
government set a price ceiling of $40, then there would be
3-186
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
D. a decrease in supply.
368. Which of the following is an example of a price ceiling?
369. A black market could arise as a result of
A. the imposition of a legal price floor below the equilibrium price.
370. A government will create a surplus in a market when it
A. sets a price ceiling above the equilibrium price.
371.
The graph above represents a competitive market for a product where the government has set a
3-188
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Diffi c u l ty:
01 Easy
Learning Objective: 03-06 Identify what government-set prices are and how they can cause
product surpluses and shortages.
Test Bank: II
To p ic :
Application: Government-Set Prices
372.
The graph above represents a competitive market for a product where the government now has
introduced a price floor of 0C. Which area in the graph represents the producers' sales revenue
after the imposition of the price floor?
373. Government-subsidized student loans tend to
3-189
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
A. increase demand for higher education, causing the price of education to rise.
B. reduce the price of higher education, because supply increases.
C. raise the price of higher education, because supply decreases.
D. reduce demand for higher education, causing the price of education to fall.
374. Buyers and sellers do not have to deal face-to-face with one another in markets.
375. The law of demand states that if price increases, other things being equal, the demand for
the product will decrease.
376. "Price" in the statement of the Law of Demand refers to the same concept as the cost of
producing the product.
3-190
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
FALSE
377. When a fruit or vegetable (such as strawberries or lentils) is in season, the demand for it
will increase as it becomes cheaper.
378. An increase in consumer incomes will cause a decrease in the demand for an inferior good.
379. Two goods are considered to be related goods by many buyers: if the price of one
increases, buyers buy more of the other. This indicates that the two goods are complements.
3-191
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Learning Objective: 03-02 Describe demand and explain how it can change.
Test Bank: II
To p ic :
Demand
380. If two goods are substitutes, a decline in the price of one will cause a decrease in the
demand for the other.
381. The law of supply states that, ceteris paribus, if the price of loans (known as "interest
rate") rises then the quantity supplied of loans will increase.
382. A decrease in the price of multi-touch screens for electronic tablets will increase the
supply of electronic tablets.
383. The development of a new production technique that lowers the cost of producing 3-D
3-192
movies will shift the supply curve of 3-D movies to the right.
384. A surplus indicates that the quantity demanded is greater than the quantity supplied at that
price.
385. If we observe the price of a good in a competitive market rising, then we can conclude that
there had been a shortage in the market.
386. If the newspapers report that there is a shortage of strawberries, it must mean that the
current price of strawberries is below the equilibrium price.
387. If there is a surplus in a market, competition among the sellers will drive price down.
388. If we observe that the price of gold is rising and the quantity of gold traded in the market is
falling, then this must be the result of an increase in the supply of gold.
389. When the government pushes for expanded use of corn, such as requiring ethanol from corn
to be used as an additive to gasoline, the impact in the market is that the supply of corn
decreases.
3-194
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
A c c e s s i b i l i t y :
Keyboard Navigation
Blooms: Understand
Di f f i c ulty :
02 Medium
Learning Objective: 03-05 Explain how changes in supply and demand affect equilibrium
prices and quantities.
Test Bank: II
To p ic :
Changes in Supply, Demand, and Equilibrium
390. If the government subsidizes the car makers in the production of cars, then the supply of
steel increases.
391. An increase in both supply and demand will lead to an increase in the equilibrium price
and an indeterminate change in the equilibrium quantity.
392. A decrease in the price of digital cameras will cause the demand for memory cards to shift
to the left.
3-195
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
Blooms: Understand
Di f f i c ulty :
02 Medium
Learning Objective: 03-05 Explain how changes in supply and demand affect equilibrium
prices and quantities.
Test Bank: II
To p ic :
Changes in Supply, Demand, and Equilibrium
393. If the demand for electronic readers and tablets increases, then their supply will increase as
price rises.
394. If the decrease in supply is less than the decrease in demand, then the equilibrium price
will decrease.
395. A price ceiling imposed by the government is intended to benefit the sellers of the product.
