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Suppose the government decides that a particular commodity is a luxury and fixes its price above the market-determined price.What implications could this policy have?

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If the government fixes the pr...

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Suppose Z is a normal good.The equilibrium price and equilibrium quantity of Z in the year 2013 was $25 and 60 units,respectively.In 2017,the equilibrium price of Z had decreased to $15 and the equilibrium quantity had also decreased to 50 units.Other things remaining the same,which of the following could explain this change?


A) A leftward shift of the supply curve of Z
B) A rightward shift of the supply curve of Z
C) A leftward shift of the demand curve for Z
D) A rightward shift of the demand curve for Z

E) A) and D)
F) None of the above

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The following figure shows the demand and supply curves for USB flash drives at different price levels. D is the demand curve, and Sā‚ is the initial supply curve. The following figure shows the demand and supply curves for USB flash drives at different price levels. D is the demand curve, and Sā‚ is the initial supply curve. -Refer to the figure above.When the supply curve of flash drives is Sā‚ and the demand curve for flash drives is D,what is the shortage in the market when the price is $5? A) 0 units B) 10 units C) 40 units D) 50 units -Refer to the figure above.When the supply curve of flash drives is Sā‚ and the demand curve for flash drives is D,what is the shortage in the market when the price is $5?


A) 0 units
B) 10 units
C) 40 units
D) 50 units

E) A) and B)
F) A) and C)

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The gasoline market in the United States is often said to be highly competitive.But it is not perfectly competitive.What makes this market not perfectly competitive?


A) If you don't like the price at one gas station, you can go to another one.
B) Different companies put different additives (designed to reduce engine deposits) in the gas they sell.
C) An individual seller can dictate what price a consumer pays for its gas.
D) Gas stations located near each other tend to charge the same or very similar prices.

E) B) and C)
F) None of the above

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Assume that a worker in a technology firm can produce 3 circuit boards in an hour.Due to subsequent innovation,she is now able to produce 6 circuit boards per hour.Other things remaining the same,the firm's supply curve is likely to ________.


A) shift to the left
B) shift to the right
C) become steeper
D) remain unchanged

E) A) and B)
F) C) and D)

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Based on the derived market quantity supplied,what is the increase in market quantity supplied of soybeans if the price of soybeans increases from $4.00 per bushel to $5.00 per bushel?


A) 400 bushels
B) 750 bushels
C) 5,000 bushels
D) 6,150 bushels

E) None of the above
F) C) and D)

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The following table shows the demand for notebooks of four consumers. The following table shows the demand for notebooks of four consumers. Define the term market demand. If these four consumers constitute the entire market,calculate the market demand for notebooks at $1,$4,$6,and $8,respectively. Define the term "market demand." If these four consumers constitute the entire market,calculate the market demand for notebooks at $1,$4,$6,and $8,respectively.

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The term "market demand" refers to the s...

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An increase in the demand for a good is represented by ________.


A) a leftward shift of a demand curve
B) a rightward shift of a demand curve
C) a leftward movement along a demand curve
D) a rightward movement along a demand curve

E) A) and B)
F) A) and C)

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With real-world examples,illustrate the various factors that can cause a shift in the demand curve of a commodity.

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The demand curve of a commodity can shif...

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Which of the following statements correctly describes a perfectly competitive market?


A) All participants in a perfectly competitive market are price-takers.
B) Haggling and bargaining is commonly observed in a perfectly competitive market.
C) In a perfectly competitive market, individual sellers and buyers can influence the market price.
D) Buyers in a perfectly competitive market pay different prices according to their individual demand.

E) None of the above
F) A) and D)

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Which of the following is not a required characteristic of a market?


A) A collection of economic agents (e.g., buyers and sellers)
B) Trade or exchange of a good or service
C) Rules and arrangements for trading
D) Government setting the price of the good or service

E) All of the above
F) B) and C)

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Why is an auction,or even a random lottery,considered better than the Henrico County scheme used to sell Apple laptops for $50?


A) Because it results in each laptop being sold at the equilibrium price.
B) Because it avoids costs associated with waiting and injuries from a stampede.
C) Because it avoids Henrico County government's control of the market.
D) Because it will lower the price of laptops other than the 1,000 units offered by the government of Henrico County.

E) B) and D)
F) All of the above

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Las Vegas,Nevada,is a popular vacation destination for residents of Hawaii.If the Hawaiian economy experiences strong economic growth and,as a result,household incomes increase on average by 10 percent,what will likely happen to the demand for airplane tickets from Hawaii to Las Vegas?


A) Demand will increase.
B) Demand will decrease.
C) No shift in demand will occur; quantity demanded will increase.
D) No shift in demand will occur; quantity demanded will decrease.

E) B) and D)
F) B) and C)

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Which of the following factors is expected to cause the demand curve for coffee to shift to the right?


A) A fall in the manufacturing cost of coffee
B) A higher tax on the sale of tea, a substitute for coffee
C) A higher personal tax on the income of all consumers
D) An increase in the supply of coffee due to better weather

E) A) and D)
F) B) and D)

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How would the following events affect the market demand for laser printers? a)A recession in the economy leading to a fall in income levels b)A fivefold increase in the price of printing paper

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a)A recession in the economy that causes...

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What are the key features of a perfectly competitive market?

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In a perfectly competitive market,(i)all...

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The numbers in the table below characterize the market for raccoon skins in Minnesota during the 2010-2011 trapping season. The demand schedule that prevailed in November and December of 2010 is denoted by "Original Quantity Demanded," and the demand schedule that prevailed from late January onward is denoted by "Quantity Demanded-Late January." The numbers in the table below characterize the market for raccoon skins in Minnesota during the 2010-2011 trapping season. The demand schedule that prevailed in November and December of 2010 is denoted by Original Quantity Demanded, and the demand schedule that prevailed from late January onward is denoted by Quantity Demanded-Late January. -Refer to the table above.Given the original demand,at a price of $18 per raccoon skin,there is a ________. A) surplus of 140 skins B) surplus of 280 skins C) shortage of 280 skins D) shortage of 140 skins -Refer to the table above.Given the original demand,at a price of $18 per raccoon skin,there is a ________.


A) surplus of 140 skins
B) surplus of 280 skins
C) shortage of 280 skins
D) shortage of 140 skins

E) B) and C)
F) C) and D)

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The market demand is the ________ of the individual demand of all the potential buyers.


A) sum
B) product
C) square of the sum
D) square root of the sum

E) A) and B)
F) A) and C)

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The figure below shows the market demand and the market supply curve for gasoline. It would be useful to find the equations of the curves to answer the questions below. The figure below shows the market demand and the market supply curve for gasoline. It would be useful to find the equations of the curves to answer the questions below. -Refer to the figure above.Which of the following events would,all else being equal,unambiguously increase the equilibrium quantity? A) Wider availability of public transportation B) Political instability in oil-producing nations C) Increase in prices of cars and decrease in wages of oil industry workers D) Decrease in prices of cars and increase in competition among oil-producing countries -Refer to the figure above.Which of the following events would,all else being equal,unambiguously increase the equilibrium quantity?


A) Wider availability of public transportation
B) Political instability in oil-producing nations
C) Increase in prices of cars and decrease in wages of oil industry workers
D) Decrease in prices of cars and increase in competition among oil-producing countries

E) A) and B)
F) B) and C)

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The quantity demanded of a good is ________.


A) determined independently of the market price of the good
B) always determined by government intervention
C) the amount of the good that sellers are willing to supply at a given market price
D) the amount of the good that buyers are willing to purchase at a given market price

E) C) and D)
F) B) and D)

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