Suppose the current equilibrium price of pizza is 5 . If the government decides the price of pizza cannot rise above 4, the result of this policy would be
a. a shortage
b. a surplus
c. that the market would remain in equilibrium but with a larger quantity bought and sold than at 5
d. at the 4 price, the quantity sold would be greater than the quantity bought
e. a shift of demand to the right
QUESTION 2Suppose a market is in equilibrium and then a price floor is established below the equilibrium price. Which of the following will happen?
a. quantity demanded will increase
b. a surplus will develop
c. a shortage will develop
d. the quantity sold will rise
e. the market will remain in equilibrium
QUESTION 3Many people argue against increasing the minimum wage because they believe the result would be increased unemployment. Which of the following best summarizes this argument? A higher minimum wage would
a. increase the supply of labor while decreasing the demand for labor
b. decrease the supply of labor while increasing the demand for labor
c. increase the quantity supplied of labor while decreasing the quantity demanded of labor
d. decrease the quantity supplied of labor while increasing the quantity demanded of labor
e. increase the supply of labor while decreasing the quantity demanded of labor
QUESTION 4Tickets to the Michigan-Notre Dame football game are usually sold out in advance of game day. This suggests that
a. the price of the tickets must be very high or else people would not consider them valuable
b. the price is set below the equilibrium level
c. the football stadium is relatively small
d. everyone who attends the game will enjoy it
e. the price is determined primarily by the fixed supply of tickets
QUESTION 5A price floor set below the equilibrium price will result in a surplus.
a. True
b. False
QUESTION 6The high pay of professional basketball players
a. is earned despite the recent drop-off in popularity of pro basketball
b. reflects the increased supply of skilled basketball players
c. is not justified by the quantity of their play
d. is due to the decline in quality of college basketball players
e. reflects the limited supply of basketball talent and the growing demand for that talent
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