Question 21

Which of the following will increase the equilibrium price (P*) and decrease the equilibrium quantity (Q*) in the automobile market?

Question 21 options:

a)	The income of consumers rises and automobiles are considered a normal good.

b)	The availability and price of public transportation falls.

c)	With lower trade barriers, foreign automakers export more cars to the U.S.

d)	Over time, and due to the war in Ukraine, gasoline prices rise.

e)	Due to research and development (R&D), new technologies enable automakers to produce cars much faster.

Question 22

Which of the following will decrease the equilibrium price (P*) and increase the equilibrium quantity (Q*) in the airline market?

Question 22 options:

a)	There is an enormous increase in the price of jet fuel.

b)	Air travel within the United States becomes more popular.

c)	Airline workers receive a substantial wage increase.

d)	There is an increase in the number of airlines offering non-stop service from New York to London.

Question 23

The most likely reason that the government would implement a ________ is because it believes that the market (equilibrium) price is too low for ________.

Question 23 options:

a)	price ceiling; consumers

b)	price floor; consumers

c)	price ceiling; producers

d)	price floor; producers

Question 24

Price ceilings that lead to shortages will impose costs on society because they:

Question 24 options:

a)	may result in black market prices.

b)	will eliminate long waiting lines.

c)	helps businesses instead of consumers.

d)	leads to a larger quantity offered on the market.

Question 2

The government imposes a price floor above the equilibrium price. This price floor will cause:

Question 25 options:

a)	demand to increase.

b)	supply to increase.

c)	a shortage of the good.

d)	an increase in the quality of the good.

e)	all of the above.

f)	none of the above.