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11 If the price of gasoline increases and we observe that demanders

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11. If the price of gasoline increases and we observe that
demanders purchase less gasoline,
then we would say that
a. Demand decreased
b. Quantity demanded decreased
c. Supply decreased
12. If the price of substitute increased the result would be
__________ prices, and we would
say__________
a. an increase in prices, quantity demanded increased
b. an increase in prices, demand increased
c. a decrease in prices, demand decreased
d. a decrease in prices, supply increased
13. Select the scenarios that result in lower prices if they
were to occur in isolation?
a. Higher technology, fall in the price of a substitute,
decrease in the price of a
complement
b. Higher productivity, lower taxes on corporations, lower
expected future prices
c. Higher income for inferior goods, higher subsidies for
firms, increase in tastes and
preferences
d. Lower costs of production, fall in the price of substitute,
reduction in consumer
subsidies
14. Which of the following is an indication that resources
are allocated efficiently in an
industry?
a. High profits
b. Long lines
c. Qs = Qd
d. Consumer surplus = producer surplus
15. When lanlords are prevented from charging market
rates, which of the following is a

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predictable consequence?
a. Deterioration of the quality of housing over time
b. Lower prices in the black market
c. The future supply of rental units will increase
d. Rents in neighboring cities without rent controls will fall
16. Demand elasticity tends to be larger in the long run
than in the short run. We would
expect that shortages caused by price ceilings to be
________________ in the short run
than in the long run.
a. Larger
b. Smaller
17. A new tax is placed on a good that results in the
equilibrium price rising from $5 to $6.
Sellers receive $3.50 after paying the tax. The market
quantity shrinks from 12 billion
units to 10 billion units. Which side of the market bears
more burden of the tax?
a. Buyers
b. Sellers
18. In the question above, the effect of the tax on the
quantity sold would have been larger
if the tax was placed on the buyer instead of the seller.
a. True
b. False
19. If a government wants to tax a good so that there is
maximum revenue generated and
the least dead weight loss, it should tax a good with
relatively _______________ demand
and it should tax ___________ side of the market to
achieve the most efficient results.
a. Inelastic, the demand
b. Inelastic, either
c. Elastic, the demand
d. Elastic, the supply
20. When a negative externality is present in a market

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11. If the price of gasoline increases and we observe that demanders purchase less gasoline, then we would say that a. Demand decreased b. Quantity demanded decreased c. Supply decreased 12. If the price of substitute increased the result would be __________ prices, and we would say__________ a. an increase in prices, quantity demanded increased b. an increase in prices, demand increased c. a decrease in prices, demand decreased d. a decrease in prices, supply increased 13. Select the scenarios that result in lower prices if they were to occur in isolation? a. Higher technology, fall in the price of a substitute, decrease in the price of a complement b. Higher productivity, lower taxes on corporations, lower expected future prices c. Higher income for inferior goods, higher subsidies for firms, increase in tastes and preferences d. Lower costs of production, fall in the price of substitute, reduction in consumer subsidies 14. Which of the following is an indication that resources are allocated efficiently in an industry? a. High profits b. Long lines c. Qs = Qd d. Consumer surplus = producer surplus 15. When lanlords are prevented from charging market rates, which of the following ...
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