Ch2
Student: ___________________________________________________________________________

1.

In a competitive market, the market demand is Qd = 60 - 6P and the market supply is Qs = 4P. A price ceiling of $3 will result in a A. B. C. D. shortage of 30 units. shortage of 15 units. surplus of 30 units. surplus of 12 units.

2.

In a competitive market, the market demand is Qd = 60 - 6P and the market supply is Qs = 4P. The full economic price under a price ceiling of $3 is A. B. C. D. 6. 7. 8. 9.

3.

The buyer side of the market is known as the: A. B. C. D. income side. demand side. supply side. seller side.

4.

The law of demand states that, holding all else constant: A. B. C. D. as price falls, demand will fall also. as
27. Technological advances will cause the supply curve to: A. B. C. D. shift to the left. shift to the right. become flatter. become steeper.

28. An ad valorem tax causes supply curve to: A. B. C. D. shift to the right. become flatter. become steeper. shift to the left.

29. Suppose the supply of good X is given by QSx = 10 + 2Px. How many units of good X are produced if the price of good X is 20? A. B. C. D. 10. 20. 30. None of the statements associated with this question are correct.

30. If a shortage exists in a market, the natural tendency is for: A. B. C. D. demand to increase. price to increase. quantity supplied to decrease. no change in the market.

31. Suppose market demand and supply are given by Qd = 100 - 2P and QS = 5 + 3P. The equilibrium price is: A. B. C. D. $15. $19. $17. $20.

32. Suppose market demand and supply are given by Qd = 100 - 2P and QS = 5 + 3P. The equilibrium quantity is: A. B. C. D. 92. 81. 45. 62.

33. The maximum legal price that can be charged in a market is: A. B. C. D. a price floor. an ad valorem tax. the market equilibrium price. a price ceiling.

34. Suppose market demand and supply are given by Qd = 100 - 2P and QS = 5 + 3P. If a price ceiling of $15 is imposed, A. B. C. D. there will be a surplus of 40 units. there will be neither a surplus or shortage. there will be a shortage of 40 units. there will be a shortage of 20 units.

35. Suppose market demand and supply are given by Qd = 100 -