1. In the summer of 2020 gasoline cost less than $2 per gallon. As you are taking this exam it is now well over $3 per gallon. Which of the following is therefore true? a. The price of gasoline is efficient at this time if quantity demanded equals quantity supplied but not necessarily fair at any price. b. The transaction cost of buying gasoline is still relatively low since there are a lot of gas stations with prices prominently displayed. c. The invisible hand is responsible for pushing prices up to the current level. d. As prices have increased, demand has not changed but quantity demanded has fallen some. e. All of the above. 2. As of early November 2021, even though factory wages are rising there is still a shortage of factory workers. This means that: a. Wages are at equilibrium but the resource directing role of prices is not working. b. An increase in the minimum wage is the only sure way to bring this market to equilibrium. c. The information being conveyed is that factory wages are still below equilibrium. d. The quantity of labor demanded is lower than quantity supplied at this time. e. The supply of labor is greater than the demand so wages will not continue to rise. 3. Which of the following is a determinant of supply in the market for Seattle Kraken hockey jerseys? Which determinant of demand for crypto currency is also a determinant of supply? a. Consumer tastes and income; expectations concerning future prices. b. The number of sellers and consumer tastes; input costs of producing crypto currency. c. The input costs of producing these jerseys; expectations concerning future prices. d. The quantity of jerseys supplied; the price of crypto currency. e. A and D only 4. A wage for bus drivers in Denver that is fair would be__________; but efficiency in this market would be where ___________________ a. A subjective opinion of the Denver bus drivers; when prevailing wages have led to equality between the quantity of bus drivers demanded and the quantity supplied. b. Impossible to calculate using the laws of economics; where wages face no pressure from the invisible hand to change over time. c. Based on the opinion of bus drivers, bus companies and people who have to pay to ride busses in Denver; where supply and demand intersect in this market. d. Likely very different than the market wage; where self-interested bus drivers and bus companies reach an agreement without the pressure of shortages, or the inefficiency of surpluses being part of the outcome. e. All of the above. 5. Say's Law ___________ ; because ___________. a. Always holds true; As prices increase, new suppliers enter a market leading to an increase in supply and lower prices over time. b. Always holds true; Entrepreneurs are the key to income creation and therefore the ultimate demand for all goods and services. c. Is often true; The law of demand, which shows that as prices increase, quantity demanded will fall, but quantity supplied will rise. d. Is rarely true; As the demand for goods and services increase, prices rise, and supply will increase. e. Is often, but not always true; Through the coordinated activities of government agencies, adequate supplies of food, clothing and shelter will exist. 6. As of November 2021, apartment rental prices in Orlando are still rising. For many Valencia students who would like to move of their parents' homes, this price has a discouraging impact. Which role of prices applies in this case? a. The rationing role which states that as prices rise, demand will fall, and fewer people move. b. The Coase Theorem and Say's Law. c. The barter-elimination role of prices that keeps students from being able to negotiate low rents. d. The rationing role of prices which discriminates based on ability to pay. e. The information role of prices - where the information being conveyed is that the market is failing. 7. The price of construction materials has risen dramatically in 2021. This means that: a. There had been a surplus of materials right before prices began to rise. b. The information being conveyed was that the price of construction materials was above equilibrium before prices increased. Now, because of higher prices there is most likely a surplus. c. Quantity demanded was greater than quantity supplied right before prices started to rise. Now, the market is most likely closer to, or at, an equilibrium condition if prices are stable at this time. d. As prices have increased demand decreased, leading the market to a place where the invisible hand no longer is putting upward pressure on prices. e. B and D only. 8. When Adam Smith talked about "the invisible hand" he argued that: a. High transaction costs normally prevent markets from achieving equilibrium. b. Prices, in the long run, end up were both fairness and efficiency are achieved. c. Changing prices leads to an "end" which buyers and sellers are not totally pleased with, but one that is efficient. d. Create mutually agreed upon prices over time if the market is free of outside interference. e. Does not work as well as price ceilings and floors, which tend to promote more efficient outcomes. f. C and D only. 9. The state of Minnesota rations camping sites on a first come, first served system. This has led to__________ and is _____________ to what America did during World War II. Venezuela ___________ on __________ to distribute food which is _________ to what Minnesota does with camping sites. a. An increase in the demand for camping sites and a decrease in supply; not similar; relies; prices; similar b. A surplus of camping sites and downward pressure on prices; similar to; does not rely; non-price rationing; similar c. The state failing to maximize revenue from this shortage-creating system; similar to; does not rely; prices; similar d. The opportunity cost of wasted time for many would-be campers; similar to; refuses to rely; the invisible hand; similar e. C and D only. 10. An increase in the minimum wage to $15 per hour would drive wages __________ market equilibrium for low-level workers at Wal-Mart in poorer urban areas and would __________ the market for the same type of workers in Williston, North Dakota. a. Below; have no impact on b. Above; have no impact on c. Below; cause unemployment d. Above; cause unemployment e. None of the above