Chapter 3 The Market Wage For Fast food Restaurants

115.

In The Economy Tomorrowanalysis in the text stated that thousands of people were waiting for a kidney

transplant. Which of the following statements is not true?

116. If the market wage for fast-food restaurants is $4 and the government enforces a minimum wage of $7, the

unemployment rate will

117. If the market wage for fast-food restaurants is $11 and the government enforces a minimum wage of $7, the

unemployment rate will

118. If corn products are found to cause cancer, then the

119.

If the wages of the workers that harvest corn each fall decreases, then the

120. If the price of “X” increases and you buy more “Y,” then

121. If the price of “X” increases and you buy less “Y,” then

122. If a price is above equilibrium,

123. If a price is below equilibrium,

124. Restaurants like to give away free salty peanuts while you wait for your food in order to

125. Ceteris paribus, for a farmer, corn and wheat are

126. Ceteris paribus, for the owner of a sawmill, lumber and the sawdust that go into particle board are

127. Ceteris paribus, a consumer that purchases a sports car must consider the price of gasoline because these

goods are

128. The term opportunity cost refers to

129. An increase in the price of gasoline will

130. An increase in the price of gasoline above equilibrium will

131. A decrease in the price of bubble gum below equilibrium will

132. As a result of specialization and trade, individuals no longer have to make choices about how to spend their

incomes.

133. The basic goals of total utility maximization, total profit maximization, and total welfare maximization explain

most market activity.

134. Unlike consumers and business firms, the public sector has no maximizing goals.

135. One of the two reasons why we are driven to buy and sell goods and services in the market is that most of us

are incapable of producing everything we want to consume.

136. Markets require a physical location to permit sellers to supply money to buyers for goods and services.

137. Land, labor, and capital are bought and sold in the product market.

138. Government goods are delivered “free,” which means that they are costless.

139. Money is critical in facilitating market exchanges and the specialization that these exchanges permit.

140. “Demand” is a statement of actual purchases.

141. According to the law of demand, a decrease in price leads to an increase in quantity demanded.

142. A change in price changes the quantity demanded and is represented by a movement along the demand curve.

143. If the prices of the factors used to produce a good change, both the demand curve and the supply curve of the

good will shift.

144. An increase in the price of one good can cause the demand for another good to increase if the goods are

substitutes.

145. An increase in the price of one good can cause the demand for another good to increase if the goods are

complements.

146. When the number of buyers in a market changes, the market demand curve shifts even if individual demand

curves do not shift.

147. The supply curve shifts to the right when a seller sells a good.

148. When individual supply curves shift, ceteris paribus, the market supply curve shifts.

149. The market supply curve is a statement of actual sales by suppliers.

150. The law of supply and the law of demand both rely on the concept of opportunity cost.

151. The market price equals the equilibrium price if quantity demanded equals quantity supplied at the market price.

152. Market price is the same thing as equilibrium price.

153. The market mechanism satisfies all consumer desires and maximizes business profits.

154. There are never shortages or surpluses when the price in a market is equal to the equilibrium price for the

market.

155. The desire for carrots changes as one moves down the demand curve for carrots.

156. Scalping is likely to appear when a price is set below equilibrium price by the seller.

157. Optimal market outcomes are the same as perfect market outcomes.

158. In the United States, market shortages of human organs are the result of price ceilings.

159. In the United States, price ceilings on human organs have caused an increase in demand.

160. In the United States, consumers, businesses, governments, and foreigners participate in both the product and

factor markets.

161. Define the law of demand and explain how this relates to typical human behavior.

162. What are substitute goods, and how does a change in the price of one substitute good influence the demand for

the other?

163. Explain the difference between a “change in quantity supplied” and a “change in supply.”

164. What is a market surplus, and how does the market attempt to resolve a surplus?

165. Define a price ceiling and explain how it affects resource allocation in a market. Give a real-world example of a

price ceiling.

Chapter 03 Test Bank Summary