QUESTION 21

1. Which would be the LEAST likely result of a price ceiling imposed in the market for gasoline?

		Buyers will line up to buy gasoline.
		Buyers will bribe station attendants to fill up their tanks.
		Some buyers will get less gasoline than they want.
		Competition in the market will be eliminated.

10 points

QUESTION 22

1. When the unemployment rate falls, college enrollment tends to:

		rise.
		remain the same.
		fall.
		defy prediction.

10 points

QUESTION 23

1. Economists thing that people are self-interested:

		only when monetary incentives are present.
		because they respond to incentives in predictable ways.
		only rarely in response to incentives.
		unless they are being altruistic.

10 points

QUESTION 24

1. The quantity demanded is the quantity that buyers are:

		wiling to buy but cannot afford.
		able to buy at a given income level but not willing to pay for it.
		willing to buy at a given income level.
		willing and able to buy at a given price.

10 points

QUESTION 25

1. Trade creates value because:

		people get what they want.
		raw materials are transformed into finished products.
		people exchange things they do not want for things they do.
		idle resources are put to use.

10 points

QUESTION 26

1. The elasticity of demand for a good is -0.75. A 4% increase in price will cause a:

		3% decrease in quantity demanded.
		5.33% increase in quantity demanded.
		5.33% decrease in quantity demanded.
		0.19% decrease in quantity demanded.

10 points

QUESTION 27

1. Amy purchased 4 cantaloupes at $2 each and 3 watermelons at $4 each. If Amy is following the optimal consumption rule, the marginal utilities of the fourth cantaloupe and third watermelon are:

		12 and 24, respectively
		4 and 3, respectively
		40 and 10, respectively
		6 and 8, respectively

10 points

QUESTION 28

1. When the demand curve for a good is unit elastic, raising the price of the good by 25% will change the revenue of the firm by:

		125%
		100%
		25%
		0%

10 points

QUESTION 29

1. When a price ceiling is in effect:

		suppliers get too strong a signal from demanders about their needs.
		demanders have no incentive to signal their needs to suppliers.
		all demander needs are met at the lower price, so there is no need to signal anything to suppliers.
		demanders cannot signal their needs to suppliers.

10 points

QUESTION 30

1. Which observation would be consistent with the impact of price ceilings?

QUESTION 21

1. Which would be the LEAST likely result of a price ceiling imposed in the market for gasoline?

		Buyers will line up to buy gasoline.
		Buyers will bribe station attendants to fill up their tanks.
		Some buyers will get less gasoline than they want.
		Competition in the market will be eliminated.

10 points

QUESTION 22

1. When the unemployment rate falls, college enrollment tends to:

		rise.
		remain the same.
		fall.
		defy prediction.

10 points

QUESTION 23

1. Economists thing that people are self-interested:

		only when monetary incentives are present.
		because they respond to incentives in predictable ways.
		only rarely in response to incentives.
		unless they are being altruistic.

10 points

QUESTION 24

1. The quantity demanded is the quantity that buyers are:

		wiling to buy but cannot afford.
		able to buy at a given income level but not willing to pay for it.
		willing to buy at a given income level.
		willing and able to buy at a given price.

10 points

QUESTION 25

1. Trade creates value because:

		people get what they want.
		raw materials are transformed into finished products.
		people exchange things they do not want for things they do.
		idle resources are put to use.

10 points

QUESTION 26

1. The elasticity of demand for a good is -0.75. A 4% increase in price will cause a:

		3% decrease in quantity demanded.
		5.33% increase in quantity demanded.
		5.33% decrease in quantity demanded.
		0.19% decrease in quantity demanded.

10 points

QUESTION 27

1. Amy purchased 4 cantaloupes at $2 each and 3 watermelons at $4 each. If Amy is following the optimal consumption rule, the marginal utilities of the fourth cantaloupe and third watermelon are:

		12 and 24, respectively
		4 and 3, respectively
		40 and 10, respectively
		6 and 8, respectively

10 points

QUESTION 28

1. When the demand curve for a good is unit elastic, raising the price of the good by 25% will change the revenue of the firm by:

		125%
		100%
		25%
		0%

10 points

QUESTION 29

1. When a price ceiling is in effect:

		suppliers get too strong a signal from demanders about their needs.
		demanders have no incentive to signal their needs to suppliers.
		all demander needs are met at the lower price, so there is no need to signal anything to suppliers.
		demanders cannot signal their needs to suppliers.

10 points

QUESTION 30

1. Which observation would be consistent with the impact of price ceilings?

		Books are printed on higher-quality paper.
		Full-service gasoline stations stay open for 24-hours.
		New automobiles are painted with more coats of paint.
		Newspapers switch to a smaller font size to decrease bulk.