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26 Cards in this Set
- Front
- Back
1. Resources are scarce; therefore, we cannot have all we want at a (zero, positive) price and there
will be various ways in which people will ____________________ for resources. |
1. zero; compete
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2. If demand shifts to the left, given supply, then the equilibrium price will (rise, fall) and the
equilibrium quantity will ______________. |
2. fall; fall
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3. If supply shifts to the right, given demand, then the equilibrium price will ___________________
and the equilibrium quantity will _________________________. |
3. fall; rise
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4. If both demand and supply shift to the right, then the equilibrium price (will rise, will fall, is
indeterminate) and the equilibrium quantity (will rise, will fall, is indeterminate). |
4. is indeterminate; will rise
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5. If both demand and supply shift to the left, then the equilibrium price (will rise, will fall, is
indeterminate), and the equilibrium quantity (will rise, will fall, is indeterminate). |
5. is indeterminate; will fall
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6. If the demand for good A or resource A rises relative to its supply, A has become relatively
(less scarce, more scarce) and its relative price will (rise, fall); if the demand for good B or resource B falls relative to its supply, then B has become relatively __________________________, and its relative price will __________________. |
6. more scarce; rise; less scarce; fall
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7. If the published price of good A remains constant, but its quality falls, then its relative price has
actually (risen, fallen). If the published price of good A remains constant, but people have to wait in line to get it, then the relative price of good A has actually _______________________, because people have an opportunity cost for their ___________________________. |
7. risen; risen; time
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8. If the demand for a good rises relative to its supply, that good becomes (less scarce, more scarce)
and its relative price will (rise, fall); this leads to (a decrease, an increase) in the quantity of the good supplied by producers of the item. |
8. more scarce; rise; an increase
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9. Price performs a(n) __________________________ function; inputs or outputs go to the
__________________________ bidders, if people are free to exchange voluntarily in markets. If such economic freedoms do not exist, then other (price, nonprice) determinants will allocate goods and services. |
9. rationing; highest; nonprice
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10. Price controls that put a price ceiling on goods and services create (surpluses, shortages); and price
floors create (surpluses, shortages). |
10. shortages; surpluses
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11. If governments place price (floors, ceilings) on goods, then black markets might emerge.
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11. ceilings
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12. Rent control is a form of price (floor, ceiling); rent control (increases, reduces) the future supply of
apartment construction, (increases, reduces) tenant mobility, (improves, causes a deterioration in) the quality of the existing stock of apartments, and hurts _________________________. |
12. ceiling; reduces; reduces; causes a
deterioration in; landlords and low income apartment hunters |
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13. By prohibiting the sale and use of tobacco products, the government would cause the supply of
cigarettes to shift to the (left, right), make cigarettes (more, less) scarce, and cause their relative price to (rise, fall). |
13. left; more; rise
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14. Import quotas, licensing arrangements, and outright bans on specific goods are forms of government
(price, quantity) restrictions. |
14. quantity
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15. An import quota tends to (lower, raise) the price to consumers.
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15. raise
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16. If governments put price floors on agricultural goods, a (shortage, surplus) will result.
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16. surplus
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T F 1. If supply shifts to the left, given demand, then the equilibrium price and the equilibrium
quantity will rise. |
1. F The equilibrium quantity falls.
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T F 2. If demand shifts to the left, given supply, then the equilibrium price and the equilibrium
quantity will fall. |
2. T
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T F 3. If both supply and demand shift to the right, then the equilibrium price and equilibrium
quantity are indeterminate. |
3. F Equilibrium quantity rises.
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T F 4. If the supply of good A increases relative to its demand, then good A is now more scarce,
and its relative price will rise. |
4. F Good A is now less scarce, and its relative price will fall.
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T F 5. If the published price is constant, but it takes consumers longer to wait in lines, the total
price has really risen. |
5. T
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T F 6. If markets are flexible and no market restrictions exist, then surpluses and shortages will not
occur, even in the short run. |
6. F No, surpluses and shortages can exist—in the short run.
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T F 7. Minimum wage laws are a form of price ceiling.
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7. F They are a price floor.
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T F 8. Rent controls help the poor who are looking for apartments, because rents are lower.
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8. F That group is hurt because they will be discriminated against and because the housing stock
diminishes. |
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T F 9. Black markets, in effect, cause prices to rise for certain buyers.
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9. T
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T F 10. Agricultural surpluses arise when governments put price ceilings on such goods.
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10. F Price ceilings cause shortages.
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