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| 1 | |
As the market price declines, quantity supplied ____ and quantity demanded ______. |
| | A) | rises, rises |
| | B) | falls, falls |
| | C) | falls, rises |
| | D) | rises, falls |
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| 2 | |
Equilibrium price and quantity will remain the same as long as |
| | A) | demand stays the same. |
| | B) | supply stays the same. |
| | C) | both demand and supply stay the same. |
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| 3 | |
When the market is at equilibrium, |
| | A) | there can be shortages, but not surpluses. |
| | B) | there can be surpluses, but not shortages. |
| | C) | there can be both shortages and surpluses. |
| | D) | there can be neither shortages nor surpluses. |
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| 4 | |
When there is a surplus, |
| | A) | quantity demanded is greater than quantity supplied. |
| | B) | quantity supplied is greater than quantity demanded. |
| | C) | quantity demanded and quantity supplied are equal. |
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| 5 | |
When there is a downward shift in supply, equilibrium price _____
and equilibrium quantity _____. |
| | A) | falls, falls |
| | B) | rises, rises |
| | C) | rises, falls |
| | D) | falls, rises |
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| 6 | |
When there is an upward shift in demand, equilibrium price ______
and equilibrium quantity _____. |
| | A) | falls, falls |
| | B) | rises, rises |
| | C) | rises, falls |
| | D) | falls, rises |
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| 7 | |
If the government establishes the market price above the equilibrium price, that price is a
price______ and there is a _________. |
| | A) | ceiling, shortage |
| | B) | ceiling, surplus |
| | C) | floor, shortage |
| | D) | floor, surplus |
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| 8 | |
Suppose that today the federal government established a price of $1 a gallon for regular gasoline. That would be a price ______ and create a _______. |
| | A) | ceiling, shortage |
| | B) | ceiling, surplus |
| | C) | floor, shortage |
| | D) | floor, surplus |
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| 9 | |
Rent control is |
| | A) | a form of price floor. |
| | B) | a form of price ceiling. |
| | C) | a form of price floor and price ceiling. |
| | D) | neither a form of price floor nor price ceiling. |
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| 10 | |
When there is a surplus, |
| | A) | quantity demanded is greater than quantity supplied. |
| | B) | quantity supplied is greater than quantity demanded. |
| | C) | quantity supplied is equal to quantity demanded. |
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| 11 | |
The XYZ Corporation provides free parking for its employees, but anyone who arrives after 8:30
a.m. has to drive around the company's three parking lots looking for a spot. What would be the best solution for this problem? |
| | A) | Provide free bus service from several park-and-ride points. |
| | B) | Get rid of the parking lot and require all employees to take public transportation or driven to work and dropped off. |
| | C) | Ask employees to car pool. |
| | D) | Charge a substantial amount to park - say, $1 an hour. |
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| 12 | |
Some people earn just the minimum wage. The best explanation for this is |
| | A) | employment discrimination on the basis of age, sex, and race. |
| | B) | that employers are forced by law to pay the minimum legal wage. |
| | C) | the workings of the market forces of supply and demand. |
| | D) | everyone must start at the bottom. |
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| 13 | |
Nearly all prices in our economy are determined by |
| | A) | law |
| | B) | supply and demand |
| | C) | custom |
| | D) | the inflation rate |
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