A. $125.
B. $375.
C. $750.
D. $1,125.
111. Suppose that a consumer has a health insurance program with co-payments of $10 per
doctor visit. If the consumer purchases 6 doctor visits and the bill charged by the doctor for 6
visits is $360, the portion of this cost covered by a third-party payer is:
A. $60.
B. $300.
C. $360.
D. $420.
112. Singapore has a system of traffic regulation called Electronic Road Pricing, in which traffic
congestion is reduced by charging motorists who drive into the city center during certain hours
of the day. Charging for use of a road is:
A. a price ceiling that reduces the excess demand for road usage.
B. a price floor that eases the shortage caused by the natural limit to how much roads can be
built in a certain geographic area.
C. a quantity restriction, as the system involves charging motorists only if they drive into the
city center during “certain hours” of the day.
D. shifting from a third-party-payer-market to one in which individual consumers have to pay
for their consumption of road usage, thus seeking to reduce excess demand.
113. Suppose that a consumer has a health insurance program with $10 co-payment per doctor
visit. If the consumer purchases 6 doctor visits and the bill charged by the doctor for 6 visits is
$360, the cost per visit paid by a third party is:
A. $40.
B. $50.
C. $60.
D. $70.
114. Suppose that the market labor supply and labor demand equations are given by Qs = 5W
and Qd = 30 – 5W. If a minimum wage is set at $4.00 (W = 4), then:
A. 15 workers will be supplied and demanded.
B. 20 workers will be supplied and demanded.
C. 20 workers will be supplied, but only 10 workers will be demanded.
D. 10 workers will be supplied, but 20 workers will be demanded.
115. The total demand for wheat in the U.S. is given by Qd = 1750 – 130 P. Domestic supply is
given by, Qs = 1000 + 170 P. Price is measured in dollars/ton and quantity is measured in
thousands of tons. The equilibrium price and quantity of wheat are:
A. $4.78 a ton and 1,129 thousands of tons respectively.
B. $4.78 a ton and 1,813 thousands of tons respectively.
C. $2.50 a ton and 2,075 thousands of tons respectively.
D. $2.50 a ton and 1,425 thousands of tons respectively.
116. Demand for single occupancy apartments is Qd = 400,000 – 250 P. Supply is given by Qs
= 200,000 + 250 P. Price of an apartment is measured in hundreds of dollars and quantity is
measured in thousands of apartments. What is equilibrium rent and quantity of apartments
rented?
A. $400 and 300,000 apartments respectively
B. $800 and 200,000 apartments respectively
C. $800 and 400,000 apartments respectively
D. $1,200 and 500,000 apartments respectively
117. Consider a market for fish whose market demand and market supply for fish is specified as
Qd = 300 – 2.5 P and Qs = – 20 + 1.5 P respectively. The equilibrium price and quantity is:
A. $40 and 200 respectively.
B. $80 and 100 respectively.
C. $100 and 80 respectively.
D. $100 and 130 respectively.
118. Refer to the following graph.
Which of the following pairs of equations describes the supply and demand curves?
A. Qs = 0.4P + 10; Qd =30 + P, respectively
B. Qs = 0.4P + 10; Qd =30, respectively
C. Qs = 2.5P – 25; P = 30 + P, respectively
D. Qs = 2.5P – 25; P = 30, respectively
119. Which of the following pairs of equations describes the supply and demand curves given in
the accompanying demand and supply tables?
A. Qs = 1; Qd = 1 – 3P, respectively
B. Qs = P; Qd = 3 – 3P, respectively
C. Qs = P + 1; Qd = 3 – P, respectively
D. Qs = P – 1; Qd = 3 – P, respectively
120. Which of the following pairs of equations describes the supply and demand curves given in
the accompanying demand and supply tables?
A. Qs = P – 40; Qd = 40P, respectively
B. Qs = P – 20; Qd = 40, respectively
C. Qs = 2P – 40; Qd = 40, respectively
D. cannot be determined
121. Refer to the following graph.
Which of the following pairs of equations describes the supply and demand curves?
A. Qs = 10; Qd = 12 – 0.25P, respectively
B. Qs = 10; Qd = 48 – 2P, respectively
C. Qs = P; Qd = 0.25P + 22, respectively
D. Qs = P; Qd = 48 + 2P, respectively
122. Given the equations for demand and supply: Qd = 48 – 4P and Qs = 4P – 16, respectively,
the quantity demanded equals the quantity supplied at a price of:
A. $4.
B. $8.
C. $12.
D. $16.
123. Given the equations for demand and supply: Qd = 48 – 4P and Qs = 4P – 16, respectively,
the market is in equilibrium when the quantity bought and sold is:
A. 8.
B. 16.
C. 24.
D. 32.
124. Suppose that initially, supply is given by the equation Qs = 4P – 16. If, as a result of lower
production costs, the quantity supplied increases by 4 at every price, the new supply equation
would be:
A. Qs = 8P – 16.
B. Qs = P – 16.
C. Qs = 4P – 20.
D. Qs = 4P – 12.
125. Suppose that initially, demand is given by the equation Qd = 48 – 4P. If, as a result of an
increase in income, the quantity demanded increases by 12 at every price, the new demand
equation would be:
A. Qd = 60 – 4P.
B. Qd = 36 – 4P.
C. Qd = 48 – 16P.
D. Qd = 48 – 8P.
126. Suppose that initially, the equations for demand and supply are Qd = 48 – 4P and Qs = 4P –
16, respectively. If the quantity supplied increases by 4 at every price (so that the supply curve
shifts to the right), the equilibrium price will change from:
A. $8 to $7.50.
B. $8 to $12.
C. $12 to $8.
D. $7.50 to $8.
127. Suppose that initially, the equations for demand and supply are Qd = 48 – 4P and Qs = 4P –
16, respectively. If the quantity demanded increases by 12 at every price (so that the demand
curve shifts to the right), the equilibrium price will change from:
A. $8 to $9.50.
B. $8 to $12.
C. $12 to $9.5.
D. $9.50 to $8.
128. Suppose that initially, supply is given by the equation Qs = 4P – 16. If, as a result of higher
production costs, the quantity supplied decreases by 4 at every price, the new supply equation
would be:
A. Qs = 8P – 16.
B. Qs = P – 16.
C. Qs = 4P – 20.
D. Qs = 4P – 12.
129. Suppose that initially, the equations for demand and supply are Qd = 48 – 4P and Qs = 4P –
16, respectively. If the quantity supplied decreases by 4 at every price (so that the supply curve
shifts to the left), the equilibrium price will change from:
A. $8 to $7.50.
B. $8 to $8.50.
C. $8.50 to $7.50.
D. $7.50 to $8.50.
130. Suppose that the free market labor supply and labor demand equations are given by Qs =
5W and Qd = 30 – 5W. If the minimum wage were set at $2.50 an hour, how many people would
not be able to find work?
A. 30
B. 20
C. 10
D. 0
131. Suppose that the market labor supply and labor demand equations are given by Qs = 5W
and Qd = 30 – 5W. If the minimum wage were set at $6 an hour, how many people would not be
able to find work?
A. 30
B. 20
C. 10
D. 0
132. Suppose that the market labor supply and labor demand equations are given by Qs = 5W
and Qd = 30 – 5W. The government has passed a law that subsidizes wages by $1 per hour. The
equilibrium wage and quantity of labor with the subsidy is:
A. $4 and 15 workers respectively.
B. $2.5 and 12.5 workers respectively.
C. $3.5 and 17.5 workers respectively.
D. $3.5 and 10 workers respectively.
133. The Rent Control Authority of Chicago has found that total market demand for single
occupancy apartments is Qd = 400,000 – 250 P. The Authority also noted that supply is given by
Qs = 200,000 + 250P. Price of an apartment is measured in hundreds of dollars and quantity is
measured in thousands of apartments. Suppose the Authority decides to impose a rent control of
$300 per single-occupant apartment, how many people will be unable to find an apartment at that
price?
A. 325,000
B. 300,000
C. 50,000
D. 275,000
134. Consider a market for fish whose market demand and market supply for fish are specified
as Qd = 300 – 2.5 P and Qs = – 20 + 1.5 P respectively. The government decides to impose a
price ceiling of $50 per ton. What would be the resulting market distortion?
A. Shortage of 120 tons of fish
B. Shortage of 175 tons of fish
C. Surplus of 120 tons of fish
D. Shortage of 175 tons of fish
135. Consider a market for fish whose market demand and market supply for fish are specified
as Qd = 300 – 2.5 P and Qs = – 20 + 1.5 P respectively. The government decides to impose a
price ceiling of $50 per ton. The possible black market price after the ceiling is:
A. $140.
B. $110.
C. $80.
D. $40.
136. Consider a market for fish whose market demand and market supply for fish are specified
as Qd = 300 – 2.5 P and Qs = – 20 + 1.5 P respectively. The government decides to impose a
price floor of $50 per ton. What would be the resulting market distortion?
A. Shortage of 120 tons of fish
B. Shortage of 175 tons of fish
C. Surplus of 120 tons of fish
D. There would be no market distortion