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If the government required the actual market price to be fixed at $6 per unit in Figure 3.3, If the government required the actual market price to be fixed at $6 per unit in Figure 3.3, Figure 3.3 Shifts of Supply and Demand A) A binding or effective price floor would result. B) A binding or effective price ceiling would result. C) A nonbinding or noneffective price ceiling would result. D) The market would reach equilibrium. If the government required the actual market price to be fixed at $6 per unit in Figure 3.3, Figure 3.3 Shifts of Supply and Demand A) A binding or effective price floor would result. B) A binding or effective price ceiling would result. C) A nonbinding or noneffective price ceiling would result. D) The market would reach equilibrium. Figure 3.3 Shifts of Supply and Demand


A) A binding or effective price floor would result.
B) A binding or effective price ceiling would result.
C) A nonbinding or noneffective price ceiling would result.
D) The market would reach equilibrium.

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When the market mechanism is allowed to operate freely,prices will determine


A) Only the mix of output to be produced and the resources to be used in the production process.
B) Only the resources to be used in the production process and for whom the output is produced.
C) The mix of output to be produced,the resources to be used in the production process,and for whom the output is produced.
D) Only for whom the output is produced and the mix of output to be produceD.The market mechanism resolves the basic economic questions of WHAT,HOW,and FOR WHOM.

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Which of the following is a market transaction?


A) A stock increases in value over the 30 years that it is owned.
B) A college student purchases a laptop computer.
C) Weather destroys a farmer's crops,leaving the farmer unable to buy groceries.
D) A radio station changes its programming from classical to rock.

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The equilibrium price in a market is found where


A) The market supply curve intersects the market demand curve.
B) The market supply curve intersects the y-axis.
C) The market demand curve intersects the y-axis.
D) The market supply curve intersects the x-axis.

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Ceteris paribus,if the opportunity cost of purchasing a good rises,then the maximum price a particular consumer is willing to pay for that good


A) Does not change since the demand curve does not change.
B) Decreases.
C) Increases.
D) Decreases as long as supply also falls.

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The federal government placed an upper limit on human organ prices,which is called a


A) Price floor.
B) Price ceiling.
C) Price support.
D) None of the choices are correct.

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One of the two reasons why we are driven to buy and sell goods and services in the market is that most of us are incapable of producing everything we want to consume. Individuals have an absolute inability to produce all the things we need and desire.

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Ceteris paribus,which of the following is most likely to cause an increase in the quantity demanded of perfume?


A) A decrease in the price of perfume.
B) A decrease in tastes for perfume.
C) An increase in income.
D) An increase in the price of electricity.

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To calculate market supply,we


A) Add the quantities supplied for each individual supply schedule horizontally.
B) Add the quantities supplied for each individual supply schedule vertically.
C) Find the average quantity supplied at each price.
D) Find the difference between the quantity supplied and the quantity demanded at each price.

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There are never shortages or surpluses when the price in a market is equal to the equilibrium price for the market. At equilibrium,the quantity demanded is equal to the quantity supplied.

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In the United States,price ceilings on human organs have caused an increase in demand. The price does not cause a change in demand-only a change in quantity demanded.

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Restaurants like to give away free salty peanuts while you wait for your food in order to


A) Encourage you to buy peanuts at the souvenir shop.
B) Buy expensive salty food on the menu.
C) Buy expensive beverages.
D) None of the choices are correct.

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Which of the following is purchased in a product market?


A) Cell phone service.
B) Undeveloped farmland in Texas.
C) Crude oil.
D) The skills of an X-ray technician.

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Suppose a hurricane hits Florida,causing widespread damage to houses and businesses.The governor of Florida places price ceilings on all building materials to keep the prices reasonable.Which of the following is the most likely result?


A) A faster recovery from the storm.
B) More people will be able to purchase building materials.
C) Shortages of building materials and a slower recovery from the storm.
D) The supply of building materials to Florida will increase.

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An increase in the equilibrium price of electricity can be caused by


A) An increase in the supply of electricity.
B) An increase in the demand for electricity.
C) A decrease in the demand for electricity.
D) An increase in the quantity demanded of electricity.

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A market shortage is


A) The amount by which the quantity demanded exceeds the quantity supplied at a given price.
B) The result of a price floor.
C) A situation in which producers cannot sell all the goods and services that they are willing and otherwise able to sell.
D) The amount by which the cost of production exceeds the price of a gooD.A market shortage is the excess of quantity demanded over quantity supplied.

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Complete Table 3.1.Then answer the indicated question.  Quantity Demanded by \text { Quantity Demanded by }  Price Alejandro Ben Carl Market $8.00842___6.001244___4.002046___2.002246___\begin{array}{rccc}\text { Price}&\text { Alejandro}&\text { Ben}&\text { Carl }&\text {Market }\\\$ 8.00 & 8 & 4 & 2&\_\_\_ \\6.00 & 12 & 4 & 4&\_\_\_ \\4.00 & 20 & 4 & 6 &\_\_\_\\2.00 & 22 & 4 & 6&\_\_\_\end{array}  Quantity Supplied by \text { Quantity Supplied by }  Price Avery Brandon Cassandra $8.006046___$6.004244___$4.002442___$2.00640___\begin{array}{llll}\text { Price }&\text {Avery }&\text {Brandon }&\text {Cassandra }\\\$ 8.00 & 60 & 4 & 6&\_\_\_ \\\$ 6.00 & 42 & 4 & 4&\_\_\_ \\\$ 4.00 & 24 & 4 & 2&\_\_\_ \\\$ 2.00 & 6 & 4 & 0&\_\_\_\end{array} Table 3.1 Individual Demand and Supply Schedules In Table 3.1,if government held the price at $3,


A) The government would be setting an effective price floor.
B) The shortage would be the same as the quantity demanded.
C) There would be a shortage.
D) The market would be in equilibrium.

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A shift in supply is defined as a change in


A) Price.
B) Quantity supplied because of a change in price.
C) Equilibrium quantity.
D) Supply because of a change in a nonprice determinant.

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Government goods are delivered "free," which means that they are costless. There is an opportunity cost associated with every service the government provides.

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What is a market surplus,and how does the market attempt to resolve a surplus?

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At a price higher than equilibrium,a sur...

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