Description
The Exploration of Economics International Edition 6th Edition by Robert L. Sexton – Test Bank
Chapter 5—Markets in Motion and Price Controls
TRUE/FALSE
1.If the demand for apples increases at the same time the supply of apples falls, the price of apples will tend to fall.
ANS:FPTS:1REF:p. 135-139
TOP: 5.1 Changes in Market Equilibrium | Changes in Both Supply and Demand
2.An increase in the equilibrium price and the equilibrium quantity would be caused by an increase in supply.
ANS:FPTS:1REF:p. 134
TOP:5.1 Changes in Market Equilibrium | A Change in Supply
3.When both supply and demand shift in the same direction, the change in the equilibrium quantity traded will be in the same direction as the shifting curves.
ANS:TPTS:1REF:p. 135-139
TOP: 5.1 Changes in Market Equilibrium | Changes in Both Supply and Demand
4.The main purpose of government price controls is to keep prices from rising above their equilibrium levels.
ANS:FPTS:1REF:p. 145
TOP: 5.2 Price Controls | Price Controls
5.Price floors get their name from the fact that they represent a minimum price below which the legal price cannot fall.
ANS:TPTS:1REF:p. 147
TOP: 5.2 Price Controls | Price Floors: The Minimum Wage
6.Price ceilings cause surpluses.
ANS:FPTS:1REF:p. 145
TOP: 5.2 Price Controls | Price Ceilings: Rent Controls
7.Either a price floor or a price ceiling will result in a smaller quantity exchanged than if the price was at its equilibrium level.
ANS:TPTS:1REF:p. 145-148
TOP: 5.2 Price Controls | Price Ceilings: Rent Controls
8.An increase in the expected future price of a good may act to increase the present price of the good.
ANS:TPTS:1REF:p. 134
TOP:5.1 Changes in Market Equilibrium | A Change in Demand
9.If there is a ceiling price below the equilibrium level, a decrease in demand will worsen the shortage.
ANS:FPTS:1REF:p. 145
TOP: 5.2 Price Controls | Price Ceilings: Rent Controls
10.One common example of a price ceiling is rent control.
ANS:TPTS:1REF:p. 145
TOP: 5.2 Price Controls | Price Ceilings: Rent Controls
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