Question

37. If the demand for baseball cards rises and the supply curve does not shift, then the price a. will rise and quantity will fall b. and quantity will rise c. will fall and quantity will rise d. and quantity will fall e. will rise, but quantity may rise or fall If the supply of coffee falls due to bad weather conditions in coffee-exporting countries, then the a. 38. price and quantity will rise b. price and quantity will fall С. e will fall and quantity will rise d. price will rise and quantity will fall quantity will fall, but price may rise or fall Assuming the most typical shapes of the demand and supply curves, which of the following could lead to an increase in the current equilibrium price for personal computers? a. a decrease is the price of computer chips b. a decrease in buyers incomes, assuming that computers are a normal good c. a technological improvement that reduces manufacturing costs d. expectations of a higher future price e. an increase in the price of computer software An increase in demand coupled with a decrease in supply results in a(n) a. e. 39. 40. increase in equilibrium price and an ambiguous effect on equilibrium quantity b. increase in equilibrium quantity and a decrease in equilibrium price decrease in equilibrium quantity and an ambiguous effect on equilibrium price d. c. surplus e. decrease in the equilibrium price and quantity 41. The most likely reason that oil prices spiked during 2007-2008 was because a. suppliers drastically cut back on production b. speculators heavily invested in the futures market c. there was an increase in demand due to an increase in usage d. there was an increase in demand as buyers began to hoard oil for future use suppliers increased their production to match the increase in demand Rent control is an example of a price ceiling. Which of the following problems must be addressed under a rent control program? a. what to do with the surplus of rental units b. how to subsidize renters so that they can afford to pay the higher rents c. how to decrease the quantity of rental units to the equilibrium level d. whether the opportunity cost of rental units equals the competitive market price e. how to allocate scarce rental units When the minimum wage is set above the equilibrium market wage, a. e. 42. 43. there will be a shortage of labor at the minimum wage b. c. d. e. will have no effect on the quantity of labor employed the unemployment rate will rise the quality of the labor force will increase the unemployment rate will fall

Answer 1

37. Option b. Because of increase in demand the price and quantity increases

38. Option d. Because of reduced quantity supply the quantity demanded increases which increases price

39. Option e. As software and personal computer are complements, an increase in price of software, increases price of personal computer

40. Option a

41. Option d. The price run-up of 2007-08 was caused by strong demand confronting stagnating world production.

42 Option e

43 Option d. With the increase in wages the demand reduces whereas supply increases which increases unemployment rate