Question 1

When the supply of a good decreases and its demand increases by the same amount:

Accepted Answer

A)  ​Price will change in the same direction as the shift in demand.
B)  ​Price will change in the same direction as the shift in supply.
C)  ​Quantity exchanged will change in the same direction as the shift in supply.
D)  ​Quantity exchanged will change in the same direction as the shift in demand.E) B) and C)
F) All of the above

Question 2

Whenever there is a surplus at a particular price, the quantity sold at that price will equal:

Accepted Answer

A)  ​the quantity demanded at that price.
B)  ​the quantity supplied minus the quantity demanded.
C)  ​the quantity supplied at that price.
D)  ​(quantity demanded plus quantity supplied) /2.E) A) and D)
F) A) and C)

Question 3

If a nonbinding price floor is imposed on a market, then the

Accepted Answer

A)  ​quantity sold in the market will decrease.
B)  ​quantity sold in the market will stay the same.
C)  ​price in the market will increase.
D)  ​price in the market will decrease.E) A) and B)
F) A) and C)

Question 4

A price ceiling set above the equilibrium price causes a surplus in the market.

Accepted Answer

A) True 
 B)False

Question 5

One common example of a price ceiling is rent control.

Accepted Answer

A) True 
 B)False

Question 6

A price ceiling set below the equilibrium price is binding.

Accepted Answer

A) True 
 B)False

Question 7

To be binding, a price floor must be set below the equilibrium pricE.​

Accepted Answer

A) True 
 B)False

Question 8

A price floor set above the equilibrium price is not binding.

Accepted Answer

A) True 
 B)False

Question 9

A shortage results when a

Accepted Answer

A)  ​nonbinding price ceiling is imposed on a market.
B)  ​nonbinding price ceiling is removed from a market.
C)  ​binding price ceiling is imposed on a market.
D)  ​binding price ceiling is removed from a market.E) C) and D)
F) All of the above

Question 10

Which of the following is an example of an unintended consequence?

Accepted Answer

A)  ​first time tax credits that cause more home sales
B)  ​a price ceiling on gasoline that causes a gas shortage and leads some gas stations to go out of business.
C)  ​increased parking fines that lead to fewer violators
D)  ​all of the aboveE) All of the above
F) A) and D)

Question 11

Refer to Exhibit 5-7. If the government were to remove a price ceiling of $2.00 per gallon in the milk market, the result would be:

Accepted Answer

A)  ​a decrease in price and increase in the quantity of milk supplied.
B)  ​a decrease in price and increase in the quantity of milk demanded.
C)  ​an increase in both price and the quantity of milk supplied.
D)  ​an increase in both price and the quantity of milk demanded.E) C) and D)
F) A) and D)

Question 12

​Exhibit 5-6 0 and S0, a movement from ____ is consistent with a decrease in both demand and supply. A) ​Point A to Point I B) ​Point A to Point C C) ​Point A to Point F D) ​Point A to Point E" class="answers-bank-image d-inline" rel="preload" >
-Refer to Exhibit 5-6. Starting with initial demand curves D0 and S0, a movement from ____ is consistent with a decrease in both demand and supply.

Accepted Answer

A)  ​Point A to Point I
B)  ​Point A to Point C
C)  ​Point A to Point F
D)  ​Point A to Point EE) C) and D)
F) A) and C)

Exam 5: Market in Motion and Price Controls

Exhibit 5-6 -Refer to Exhibit 5-6. Starting with initial demand curves D₀ and S₀, a movement from ____ is consistent with a decrease in both demand and supply.

Correct Answer
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A shortage results when a

Correct Answer
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A price ceiling set below the equilibrium price is binding.

Correct Answer
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A price floor set above the equilibrium price is not binding.

Correct Answer
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If a nonbinding price floor is imposed on a market, then the

Correct Answer
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Refer to Exhibit 5-7. If the government were to remove a price ceiling of $2.00 per gallon in the milk market, the result would be:

Correct Answer
verified

Whenever there is a surplus at a particular price, the quantity sold at that price will equal:

Correct Answer
verified

When the supply of a good decreases and its demand increases by the same amount:

Correct Answer
verified

To be binding, a price floor must be set below the equilibrium pricE.

Correct Answer
verified

A price ceiling set above the equilibrium price causes a surplus in the market.

Correct Answer
verified

One common example of a price ceiling is rent control.

Correct Answer
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Which of the following is an example of an unintended consequence?

Correct Answer
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Exam 5: Market in Motion and Price Controls

​Exhibit 5-6 -Refer to Exhibit 5-6. Starting with initial demand curves D0 and S0, a movement from ____ is consistent with a decrease in both demand and supply.

Correct AnswerverifiedShow Answer

A shortage results when a

Correct AnswerverifiedShow Answer

A price ceiling set below the equilibrium price is binding.

Correct AnswerverifiedShow Answer

A price floor set above the equilibrium price is not binding.

Correct AnswerverifiedShow Answer

If a nonbinding price floor is imposed on a market, then the

Correct AnswerverifiedShow Answer

Refer to Exhibit 5-7. If the government were to remove a price ceiling of $2.00 per gallon in the milk market, the result would be:

Correct AnswerverifiedShow Answer

Whenever there is a surplus at a particular price, the quantity sold at that price will equal:

Correct AnswerverifiedShow Answer

When the supply of a good decreases and its demand increases by the same amount:

Correct AnswerverifiedShow Answer

To be binding, a price floor must be set below the equilibrium pricE.​

Correct AnswerverifiedShow Answer

A price ceiling set above the equilibrium price causes a surplus in the market.

Correct AnswerverifiedShow Answer

One common example of a price ceiling is rent control.

Correct AnswerverifiedShow Answer

Which of the following is an example of an unintended consequence?

Correct AnswerverifiedShow Answer

Exhibit 5-6 -Refer to Exhibit 5-6. Starting with initial demand curves D₀ and S₀, a movement from ____ is consistent with a decrease in both demand and supply.

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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To be binding, a price floor must be set below the equilibrium pricE.

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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