ECON 213 ECON213 Chapter 4 A Supply and Demand Applications and Extensions (Liberty University)

ECON213 Chapter 4 A Supply and Demand Applications and Extensions (Liberty University)

MULTIPLE CHOICE (233 questions)

1.Other things constant, a decrease in the demand for computers will

2.When a government subsidy is granted to the sellers of a product, buyers can end up capturing some of the benefit because

3.Which of the following is a major disadvantage of setting the price of a good below equilibrium and using waiting in line rather than price to ration the good?

4.When a price floor is above the equilibrium price,

5.Rent control applies to about two-thirds of the private rental housing in New York City. Economic theory suggests that the below-equilibrium prices established by rent controls would

6.Which of the following is the most likely result of an increase in the minimum wage?

7.If the demand for a good is highly inelastic, a tax on the good

8.If there was an increase in the excise tax imposed on beer suppliers, what would be the effect on the equilibrium price and quantity of beer?

9.The more elastic the supply of a product, the more likely it is that the

10.The Laffer curve illustrates the concept that

11.When a supply and demand model is used to analyze the market for labor,

12.Other things constant, as the price of a resource increases,

13.Which of the following would tend to increase the price of lumber?

14.A substantial revision of the income tax code that made business and personal tax returns much easier to complete would tend to cause which of the following changes in the labor market for accountants?

15.How would an increase in the price of paper influence the market for college textbooks?

16.A new law requiring plumbers to pass strict certification tests that reduce the number of plumbers would

17.An increase in the number of students attending college would tend to

18.An increase in the number of students graduating with a major in engineering would result in

19.Other things constant, an increase in the demand for motorcycles will

20.Which of the following would tend to increase the wage of coal miners?

21.An increase in the demand for a product will cause the

22.Which of the following is correct?

23.Other things constant, how will a decrease in the wages of teenagers affect the market for fast food hamburgers?

24.Other things constant, if a labor union is able to successfully increase the wages of autoworkers, there will be

25.How would a decrease in lumber prices influence the home construction market?

26.When prices of products are set below equilibrium,

27.The imposition of price ceilings on a market often results in

28.If a government price control succeeds in affecting price, it can be expected to lead to a corresponding

29.A price ceiling set below an equilibrium price tends to cause persistent imbalances in the market because

30.Rent controls tend to cause persistent imbalances in the market for housing because

31.Price controls will tend to cause misallocation of resources because

32.The presence of price controls in a market usually is an indication that

33.Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling,

34.When policymakers impose price controls, they

35.Economists have argued that rent control is "the best way to destroy a city, other than bombing." Why would economists say this?

36.Under rent control, tenants can expect

37.Under rent control, landlords cease to be responsive to tenants' concerns about the quality of the housing because

38.Which of the following statements about rent control is accurate?

39.Which of the following characterizations is correct?

40.A minimum wage that is set above a market's equilibrium wage will result in

41.When government imposes price controls in a market,

42.Which of the following is the most likely outcome of minimum wage laws?

43.A law establishing a maximum legal price for a good or service (rent controls for example) is known as

44.A price ceiling that sets the price of a good below market equilibrium will cause

45.If a government imposed price ceiling legally sets the price of beef below market equilibrium, which of the following will most likely happen?

46.Suppose the market equilibrium price of corn is $5 per bushel, and the government sets a price ceiling of $4 per bushel. What is the most likely result of this action?

47.When a price ceiling is imposed below the equilibrium price of a commodity,

48.In a market economy, which of the following will most likely cause a prolonged milk shortage?

49.When a shortage of a good is present due to a price ceiling,

50.If we observe long lines of people camping out to get tickets to a concert, this tells us

51.Which of the following would occur following the imposition of a price ceiling that sets the price of a good (for example, rental housing) below the market equilibrium?

52.When a price ceiling prevents a higher market price from rationing a good,

53.After a natural disaster, such as a hurricane, the increased demand for certain items (like lumber, electric generators, and chainsaws) causes their prices to rise. These higher prices

54.When several hurricanes hit Florida in 2004, a number of local governments imposed price controls that prevented sellers from raising their prices for badly needed products like plywood and generators. In the areas where the controls were imposed, they resulted in

55.Because of price controls in the former Soviet Union, people often waited in long lines for food and other necessities. Modern economic theory would indicate that, relative to price rationing, waiting in line is