practice test 1

practice test 1 - Exam Name_ MULTIPLE CHOICE. Choose the...

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Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) A price ceiling A) is an illegal price. B) is the price that exists in a black market. C) is the maximum price that can legally be charged. D) Both answers A and B are correct. 1) 2) A price ceiling in the market for fuel oil that is below the equilibrium price will A) increase the supply of fuel oil. B) decrease the demand for fuel oil. C) lead to the quantity supplied of fuel oil exceeding the quantity demanded. D) lead to the quantity demanded of fuel oil exceeding the quantity supplied. 2) Price (dollars per slice of pizza) Quantity supplied (slices of pizza per week) Quantity demanded (slices of pizza per week) 11 0 5 0 22 0 4 0 33 0 3 0 44 0 2 0 55 0 1 0 3) The demand and supply schedules for slices of pizza are in the table above. A price ceiling of $4 per slice results in A) a shortage of 20 slices of pizza. B) a surplus of 20 slices of pizza. C) neither a shortage nor a surplus. D) a shortage of 40 slices of pizza. 3) 1
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4) The figure above illustrates the bagel market. Which of the following statements is correct? A) With a price ceiling of $3.00 per bagel, the quantity demanded is greater than the quantity supplied. B) With a price ceiling of $1.00 per bagel, the quantity demanded is equal to the quantity supplied. C) With a price ceiling of $1.00 per bagel, there is a shortage of bagels. D) All of the above answers are correct. 4) 5) In a housing market with no rent ceilings, the equilibrium rent is that for which the quantity of apartments demanded A) is greater than the quantity supplied. B) is less than the quantity supplied. C) equals the quantity supplied. D) None of the above answers is correct because without rent ceilings there is no equilibrium rent. 5) 6) Suppose the equilibrium price for an apartment in Boston is $1,500. A rent ceiling of $1,600 per month leads to A) no change in the Boston apartment market. B) fair prices in the Boston apartment market. C) a shortage of apartments in Boston. D) a surplus of apartments in Boston. 6) 7) One of the consequences of rent controls set below the equilibrium rent is A) the establishment of landlord unions. B) surpluses of apartments. C) decreased search activity. D) shortage of apartments. 7) 2
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8) A rent ceiling in a housing market A) increases the time people spend searching for housing. B) makes all rents lower than the ceiling illegal to charge. C) is set above the equilibrium rent. D) Both answers B and C are correct. 8) 9) The deadweight loss in a housing market with a rent control set below the equilibrium rent is the A) loss to those who cannot find apartments and the gain to landlords who charge black market rents. B) loss to tenants and the gain to landlords who have the incentive to offer more apartments for rent.
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practice test 1 - Exam Name_ MULTIPLE CHOICE. Choose the...

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