Principles of Macroeconomics: A Study Guide

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Chapter 4: The Price System and Demand and Supply True or False
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1. There is no better price rationing device than the market system TRUE FALSE 2. The idea of "willingness to pay" means that as prices rise, lower-income people are prevented from buying a good. TRUE FALSE 3. The problem with the market mechanism is that sometimes it is impossible to find a price that will clear a market. TRUE FALSE
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4. Very often, attempts to distribute costs and benefits among households result in unintended outcomes. TRUE FALSE 5. When price is above equilibrium price, quantity supplied is greater than quantity
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Unformatted text preview: demanded. TRUE FALSE 6. The result of a price ceiling is that quantity supplied will be greater than quantity demanded. TRUE FALSE 7. Queuing means waiting in line. TRUE FALSE 8. Black markets are a means of reestablishing market rules once markets are declared illegal. TRUE FALSE 9. A ban on imported oil means that consumers will pay less and consume more oil than before. TRUE FALSE 10. Prices determine the allocation of resources. TRUE FALSE...
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