Question 1

Refer to Table 3.1 to answer the following question Table 3.1 Individual Demand and Supply Schedules
$\begin{array}{l}
\quad\quad\quad\quad\quad\quad\text { Quartity Dernarded by }\
\begin{array} { | r | r | r | r | c | } 
\hline { \text { Price } } &  { \text { Alejandro } } & { \text { Ben } } & \text { Carl } & \text { Market } \
\hline \$ 8.00 & 8 & 4 & 2 & \
\hline 6.00 & 12 & 4 & 4 & \
\hline 4.00 & 20 & 4 & 6 & \
\hline 2.00 & 22 & 4 & 6 & \
\hline
\end{array}
\end{array}$ $\begin{array}{l}
\quad\quad\quad\quad\quad\quad\text { Quartity Supplied by }\
\begin{array} { | r | r | r | r | c | } 
\hline { \text { Price } } &  { \text { Avery } } & { \text { Brandon } } & \text { Cassandra} &\quad\quad\quad\quad \
\hline \$ 8.00 & 60 & 4 &6 & \
\hline \$6.00 & 42 & 4 & 4 & \
\hline \$4.00 & 24 & 4 & 2 & \
\hline\$ 2.00 &6 & 4 & 0 & \
\hline
\end{array}
\end{array}$
 In Table 3.1,if the price is $4,the market will

Accepted Answer

The answer of Refer to Table 3.1 to answer the...

Question 2

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

Accepted Answer

The upper limit on human organ prices set by the federal government is an example of a price ceiling. This is a government-mandated maximum price that can be charged for a good or service. In this case, the government is trying to ensure that organ transplants are accessible and affordable for those who need them, by preventing the prices from being driven up too high by market forces.

Question 3

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

Accepted Answer

Price ceilings on building materials will discourage suppliers from bringing in more materials since the prices are set too low to profit. The limited supply will lead to shortages and slower recovery from the storm.

Question 4

In a market economy,which of the following determines the answer to the WHAT to produce question?

Accepted Answer

In a market economy, prices and profit determine what to produce. Producers will tend to produce the goods and services that have the highest demand and offer the highest profit margins. Consumers determine demand through their purchasing decisions, which then affects prices and profit.

Question 5

Choose the letter of the diagram in Figure 3.1 that best describes the type of shift that would occur in each situation for the market listed on the left,ceteris paribus.Figure 3.1 Shifts of Supply and Demand for Flat-screen TVs: the technology required for flat-screen TV production becomes cheaper.

Accepted Answer

A decrease in the cost of production would shift the supply curve to the right. Option B shows a rightward shift of the supply curve, indicating an increase in supply at each given price level. Option A shows a leftward shift of the demand curve, which is not relevant in this scenario. Option C shows a rightward shift of the demand curve, which is also not relevant in this scenario. Option D shows a leftward shift of the supply curve, which is opposite to what would occur with a decrease in production costs.

Question 6

Refer to Table 3.1 to answer the following question Table 3.1 Individual Demand and Supply Schedules
$\begin{array}{l}
\quad\quad\quad\quad\quad\quad\text { Quartity Dernarded by }\
\begin{array} { | r | r | r | r | c | } 
\hline { \text { Price } } &  { \text { Alejandro } } & { \text { Ben } } & \text { Carl } & \text { Market } \
\hline \$ 8.00 & 8 & 4 & 2 & \
\hline 6.00 & 12 & 4 & 4 & \
\hline 4.00 & 20 & 4 & 6 & \
\hline 2.00 & 22 & 4 & 6 & \
\hline
\end{array}
\end{array}$ $\begin{array}{l}
\quad\quad\quad\quad\quad\quad\text { Quartity Supplied by }\
\begin{array} { | r | r | r | r | c | } 
\hline { \text { Price } } &  { \text { Avery } } & { \text { Brandon } } & \text { Cassandra} &\quad\quad\quad\quad \
\hline \$ 8.00 & 60 & 4 &6 & \
\hline \$6.00 & 42 & 4 & 4 & \
\hline \$4.00 & 24 & 4 & 2 & \
\hline\$ 2.00 &6 & 4 & 0 & \
\hline
\end{array}
\end{array}$
  In Table 3.1,if the price is $2,the market will

Accepted Answer

At a price of $2, the quantity demanded is 50 units (22 + 4 + 6 + 18) and the quantity supplied is 24 units (6 + 4 + 2 + 12). Therefore, there will be a shortage of 26 units (50 - 24).

Question 7

Choose the letter of the diagram in Figure 3.1 that best describes the type of shift that would occur in each situation for the market listed on the left,ceteris paribus.Figure 3.1 Shifts of Supply and Demand Steel: the government introduces environmental restrictions on the dumping of wastes from producing steel.

Accepted Answer

The answer of Choose the letter of the diagram in...

Question 8

Refer to Table 3.1 to answer the following question Table 3.1 Individual Demand and Supply Schedules
$\begin{array}{l}
\quad\quad\quad\quad\quad\quad\text { Quartity Dernarded by }\
\begin{array} { | r | r | r | r | c | } 
\hline { \text { Price } } &  { \text { Alejandro } } & { \text { Ben } } & \text { Carl } & \text { Market } \
\hline \$ 8.00 & 8 & 4 & 2 & \
\hline 6.00 & 12 & 4 & 4 & \
\hline 4.00 & 20 & 4 & 6 & \
\hline 2.00 & 22 & 4 & 6 & \
\hline
\end{array}
\end{array}$  $\begin{array}{l}
\quad\quad\quad\quad\quad\quad\text { Quartity Supplied by }\
\begin{array} { | r | r | r | r | c | } 
\hline { \text { Price } } &  { \text { Avery } } & { \text { Brandon } } & \text { Cassandra} &\quad\quad\quad\quad \
\hline \$ 8.00 & 60 & 4 &6 & \
\hline \$6.00 & 42 & 4 & 4 & \
\hline \$4.00 & 24 & 4 & 2 & \
\hline\$ 2.00 &6 & 4 & 0 & \
\hline
\end{array}
\end{array}$ In Table 3.1,if the price is $8,the market will

Accepted Answer

At a price of $8, the quantity demanded is 34 units (8+4+22) and the quantity supplied is 70 units (60+4+6). Therefore, there will be a surplus of 36 units (70-34).

Question 9

Price ceilings are intended to address the problem of

Accepted Answer

Price ceilings are implemented to make essential goods and services more affordable to lower-income individuals, addressing inequity in the distribution of goods and services. They are not primarily aimed at solving inefficiency in production, preventing business bankruptcies, or addressing shortages. In fact, price ceilings can sometimes lead to shortages when the price is set below the market equilibrium.

Question 10

If the government places a price ceiling on cancer-treating drugs,then

Accepted Answer

Placing a price ceiling on cancer-treating drugs will limit the price that manufacturers can charge for the drugs. This will make it less profitable for them to produce and sell these drugs, which could lead to a decrease in the supply of cancer-treating drugs available in the market. As a result, fewer cancer-treating drugs will be available. However, this does not necessarily mean that fewer people will die from cancer.

Question 11

Refer to Table 3.1 to answer the following question Table 3.1 Individual Demand and Supply Schedules
$\begin{array}{l}
\quad\quad\quad\quad\quad\quad\text { Quartity Dernarded by }\
\begin{array} { | r | r | r | r | c | } 
\hline { \text { Price } } &  { \text { Alejandro } } & { \text { Ben } } & \text { Carl } & \text { Market } \
\hline \$ 8.00 & 8 & 4 & 2 & \
\hline 6.00 & 12 & 4 & 4 & \
\hline 4.00 & 20 & 4 & 6 & \
\hline 2.00 & 22 & 4 & 6 & \
\hline
\end{array}
\end{array}$ 
 $\begin{array}{l}
\quad\quad\quad\quad\quad\quad\text { Quartity Supplied by }\
\begin{array} { | r | r | r | r | c | } 
\hline { \text { Price } } &  { \text { Avery } } & { \text { Brandon } } & \text { Cassandra} &\quad\quad\quad\quad \
\hline \$ 8.00 & 60 & 4 &6 & \
\hline \$6.00 & 42 & 4 & 4 & \
\hline \$4.00 & 24 & 4 & 2 & \
\hline\$ 2.00 &6 & 4 & 0 & \
\hline
\end{array}
\end{array}$
 In Table 3.1,if government held the price at $3,

Accepted Answer

At a price of $3, which is not explicitly shown in the table but can be inferred to be between the prices of $2.00 and $4.00, the quantity demanded would be higher than the quantity supplied. This is because, as price decreases, the quantity demanded typically increases while the quantity supplied decreases, leading to a shortage where the quantity demanded exceeds the quantity supplied.

Question 12

In a market economy,the people who receive the goods and services produced are those who

Accepted Answer

In a market economy, goods and services are distributed based on the principle of willingness and ability to pay. Those who can afford to pay the market price for the goods and services will receive them, while those who cannot afford to pay the market price will not. This principle is what drives the competitive nature of the market and ensures that resources are allocated efficiently.

Question 13

The price ceiling that the federal government placed on human organs caused

Accepted Answer

A price ceiling is a maximum price that can be charged for a good or service, set by the government. When the price ceiling is below the market equilibrium price, it creates a shortage because the quantity demanded exceeds the quantity supplied at that price. In the case of human organs, a price ceiling would cause a shortage because the supply of organs (donors) would decrease due to the lower financial incentive to donate, while the demand for organs (patients in need of transplants) would increase at the lower price. Therefore, the correct answer is C, a shortage.

Question 14

If a price ceiling is to be effective,it should be set

Accepted Answer

A price ceiling is a government-imposed limit on how high a price can be charged for a good or service. If the price ceiling is set below the equilibrium price, it will create a shortage because demand for the good will exceed the quantity supplied at that price. This will lead to consumers being unable to purchase the good they desire, potentially causing discontent and unfairness in the market. Thus, a price ceiling must be set below the equilibrium price to be effective, but this will result in a shortage.

Question 15

Choose the letter of the diagram in Figure 3.1 that best describes the type of shift that would occur in each situation for the market listed on the left,ceteris paribus.Figure 3.1 Shifts of Supply and Demand Designer clothes: consumer confidence in the economy improves.

Accepted Answer

The answer of Choose the letter of the diagram in...

Question 16

Refer to Table 3.1 to answer the following question Table 3.1 Individual Demand and Supply Schedules
$\begin{array}{l}
\quad\quad\quad\quad\quad\quad\text { Quartity Dernarded by }\
\begin{array} { | r | r | r | r | c | } 
\hline { \text { Price } } &  { \text { Alejandro } } & { \text { Ben } } & \text { Carl } & \text { Market } \
\hline \$ 8.00 & 8 & 4 & 2 & \
\hline 6.00 & 12 & 4 & 4 & \
\hline 4.00 & 20 & 4 & 6 & \
\hline 2.00 & 22 & 4 & 6 & \
\hline
\end{array}
\end{array}$

$\begin{array}{l}
\quad\quad\quad\quad\quad\quad\text { Quartity Supplied by }\
\begin{array} { | r | r | r | r | c | } 
\hline { \text { Price } } &  { \text { Avery } } & { \text { Brandon } } & \text { Cassandra} &\quad\quad\quad\quad \
\hline \$ 8.00 & 60 & 4 &6 & \
\hline \$6.00 & 42 & 4 & 4 & \
\hline \$4.00 & 24 & 4 & 2 & \
\hline\$ 2.00 &6 & 4 & 0 & \
\hline
\end{array}
\end{array}$

In Table 3.1,the equilibrium market quantity is

Accepted Answer

To find the equilibrium market quantity, we need to find where the quantity demanded equals the quantity supplied. By adding the individual quantities demanded and supplied at each price level, we can identify the equilibrium. At a price of $8.00, the quantity demanded is 14 (8+4+2) and the quantity supplied is 70 (60+4+6). At $6.00, the quantity demanded is 20 (12+4+4) and the quantity supplied is 50 (42+4+4). At $4.00, the quantity demanded is 30 (20+4+6) and the quantity supplied is 30 (24+4+2). At $2.00, the quantity demanded is 32 (22+4+6) and the quantity supplied is 10 (6+4+0). The equilibrium is found at a price of $4.00, where the quantity demanded equals the quantity supplied at 30 units.

Question 17

When economists talk about "optimal outcomes" in the marketplace,they mean that

Accepted Answer

Economists recognize that resources are limited and that individuals and businesses face budget constraints. Therefore, the goal is to allocate resources in a way that maximizes overall welfare, taking into account both consumer and producer surplus. The term "optimal outcomes" suggests that the market is likely to achieve the best possible allocation of resources, given these constraints and assuming competition is healthy. However, this does not mean that the allocation is perfect or that everyone will be completely satisfied.

Question 18

Choose the letter of the diagram in Figure 3.1 that best describes the type of shift that would occur in each situation for the market listed on the left,ceteris paribus.Figure 3.1 Shifts of Supply and Demand Candy bars: People become more health-conscious and prefer vegetables instead of candy bars.

Accepted Answer

The answer of Choose the letter of the diagram in...

Question 19

In a market economy,which of the following is an incentive for producers to produce efficiently?

Accepted Answer

Producers have an incentive to produce efficiently in a market economy because it leads to higher profits. The more efficiently they can produce a product, the more they can sell it for and the greater their profits will be.

Question 20

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

Accepted Answer

When the market mechanism operates freely, prices would determine the mix of output to be produced, the resources to be used in the production process, and for whom the output is produced. This is because the prices of goods and services would signal demand and supply conditions, which would then guide the allocation of resources to produce the goods and services that are most valuable to consumers. Additionally, prices would determine who can afford to buy the goods and services, and therefore, for whom the output is produced.

Quiz 3: Supply and Demand

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

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

In a market economy,which of the following determines the answer to the WHAT to produce question?

Price ceilings are intended to address the problem of

If the government places a price ceiling on cancer-treating drugs,then

In a market economy,the people who receive the goods and services produced are those who

The price ceiling that the federal government placed on human organs caused

If a price ceiling is to be effective,it should be set

Choose the letter of the diagram in Figure 3.1 that best describes the type of shift that would occur in each situation for the market listed on the left,ceteris paribus.Figure 3.1 Shifts of Supply and Demand Designer clothes: consumer confidence in the economy improves.

When economists talk about "optimal outcomes" in the marketplace,they mean that

In a market economy,which of the following is an incentive for producers to produce efficiently?

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