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1 | |
Suppose an ice storm knocks down power lines and it is announced on the news that the local area would be without power for one week. We would expect to see |
| | A) | an increase in the price and quantity of power generators. |
| | B) | a decrease in the price and quantity of power generators. |
| | C) | an increase in the price of generators and a decrease in their sales. |
| | D) | a decrease in the price of generators and an increase in their sales. |
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2 | |
If gas prices fell sharply, what would economists expect to happen in the market for fuel-efficient hybrid cars? |
| | A) | an increase in the price and quantity of hybrid cars. |
| | B) | a decrease in the price and quantity of hybrid cars. |
| | C) | an increase in the price of hybrid cars and a decrease in their sales. |
| | D) | a decrease in the price of hybrid cars and an increase in their sales. |
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3 | |
Housing prices have been rising sharply over the past few years. At the same time, sales of new homes have reached record highs. Which of the following explains this phenomenon? |
| | A) | The housing industry violates the law of demand. |
| | B) | New home-building technologies have increased the supply of homes. |
| | C) | Very low interest rates have increased the demand for homes. |
| | D) | A growing shortage of land has decreased the supply of homes. |
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4 | |
Which of the following graphs best illustrates what would happen in the market for onion dip, if the price of potato chips increased?
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| | A) | A |
| | B) | B |
| | C) | C |
| | D) | D |
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5 | |
Given the market illustrated below, if the government set a price floor at $4, the result would be
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| | A) | a shortage of 80 units. |
| | B) | a shortage of 60 units. |
| | C) | a surplus of 80 units. |
| | D) | a surplus of 60 units. |
| | E) | a sale of 50 units because a price floor above equilibrium has no effect. |
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6 | |
Rent controls |
| | A) | are a common example of price floors. |
| | B) | typically result in an inefficient surplus of housing. |
| | C) | are the best way to eliminate bribes ("key money") to landlords. |
| | D) | often result in a shortage of housing. |
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7 | |
Other things remaining the same, when Americans want to buy more goods made in Europe, this causes |
| | A) | the demand for Euros to increase along with their price. |
| | B) | the demand for Euros to decrease along with their price. |
| | C) | the supply of Euros to decrease along with their price. |
| | D) | the supply of Euros to increase along with their price. |
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8 | |
If the US government imposed a tariff on the importation of maple syrup imported from Canada, economists would expect |
| | A) | the price and quantity of Canadian maple syrup to increase in the US. |
| | B) | the price and quantity of Canadian maple syrup to decrease in the US. |
| | C) | the price of Canadian maple syrup to increase while its quantity decreased in the US. |
| | D) | the price of Canadian maple syrup to decrease while its quantity increased in the US. |
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9 | |
If individuals no longer needed a license to practice law, we might reasonably expect |
| | A) | the price of legal services to increase. |
| | B) | the price of legal services to decrease. |
| | C) | a decrease in the amount of legal services provided. |
| | D) | to see no impact on the legal services industry. |
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10 | |
With a third-party-payer market for healthcare, the total cost of healthcare increases because |
| | A) | the equilibrium price increases. |
| | B) | the quantity supplied increases. |
| | C) | the quantity demanded increases. |
| | D) | all of the above. |
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