question
If supply increases while demand decreases
answer
the equilibrium price will definitely decrease.
question
Minimum wage is an example of a price floor
answer
True
question
If we observe a rise in the equilibrium price and a decline in the equilibrium quantity, then which of the following must have happened?
answer
None of the above is correct.
question
An excess supply occurs at prices below the equilibrium price.
answer
False
question
When rent controls are imposed below the current market price they can do all except
answer
create excess supply of rental housing.
question
Under which scenario will sellers of a product find it easier to pass cost increases onto consumers?
answer
When the demand curve is vertical
question
Which of the following developments in the housing market will help increase housing prices?
answer
A decline in the supply
question
A decline in the supply will cause a change in
answer
the level of quantity demanded.
question
If public transportation is a substitute to driving and downtown parking is a complementary service to driving, then a rise in the price of downtown parking will cause the supply of public transportation to increase.
answer
False
question
Excess demand causes the price to
answer
increase
question
When costs of production of a product increase, the equilibrium level of output of that product decreases, assuming that the demand is consistent with the law of demand.
answer
True
question
Which of the following best describes a normal good?
answer
None of the above is correct.
question
If two goods are complements in consumption, then an increase in the price of one of these goods will cause
answer
the demand for the other good to decrease.
question
Assume that corn and wheat are substitutes in production; that is, the same inputs can be used to produce either one of these two commodities. Also assume that the laws of supply and demand apply in both markets. If the demand for one of these commodities increases, what will likely happen in the other market?
answer
The supply will decrease
question
Consumer financing has become a common factor in the retail auto market; thus, any increases in the interest rate on car loans would cause the demand for cars to decline.
answer
True
question
At the equilibrium price
answer
quantity demanded equals quantity supplied
question
Assume that consumers who shop for single-family homes do not consider condos. Also assume that consumers who wish to purchase condos do not look at single-family homes. Based on these assumptions we can argue that these are two different markets.
answer
True
question
If we define unemployment as a surplus of labor, then a minimum wage set above the market-clearing wage will increase the level of unemployment.
answer
True
question
Technological progress helps increase the productivity of labor, defined as the number of units of output produced per hour of labor. A rise in the productivity of labor in the production process, ceteris paribus, will cause
answer
the supply of the output to increase
question
An economic recession with a decline in household incomes will negatively impact all retail businesses.
answer
False
question
If we assume that the current equilibrium wage for low-skilled labor is $8 per hour and the minimum wage is increased from $5.75 to $7.25 per hour, then
answer
unemployment among low-skilled workers will remain unaffected
question
eBay shoppers are frequently asked by eBay sellers to pay the cost of shipping the purchased item. Who really pays the shipping cost in eBay transactions?
answer
Both parties are likely to share the cost.
question
...
answer
...
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