Combining Supply and Demand (D)Online version Combining Supply and Demand by Christopher Muniz 1 What happens when wages are set above the equilibrium level by law? a Firms tend to try to break the law and hire people at the equilibrium level. b Firms employ more workers than they would at the equilibrium wage. c Firms employ fewer workers than they would at the equilibrium wage. d Firms hire more workers but for fewer hours than they would at the equilibrium wage. 2 On which kinds of goods do governments generally place price ceilings? a those that are cheap but could become more expensive without the ceiling. b those that are not necessary but have become customary c Those that are essential and cheap d Those that are essential but too expensive for some consumers. 3 When buyers will purchase exactly as much as sellers are willing to sell, what is the condition that has ben reached? a Supply and Demand b Excess Demand c Equilibrium d Price Floor 4 Which of the following is an example of a good whose price goes down because of improvements in technology? a computers b running shoes c hard-bound books d typewriters 5 What happens when the supply of a nonperishable good is greater than the consumer wants to buy? a the good is thrown away b the good becomes a luxury and the price rises c either the good remains unsold or the price drops d either the good is saved for later sale or the price is raised 6 What happens to a market in equilibrium when there is an increase in supply? a Excess supply means that producers will make less of the good. b Quantity demanded will exceed quantity supplied, so the price will drop. c Quantity supplied will exceed quantity demanded, so the price will drop. d Undersupply means that the good will become very expensive. 7 Which of the following is a situation that makes the market behave inefficiently? a when consumers do not have enough information to make good choices. b when producers have the power to find out exactly what to produce c when both consumers and producers are fully informed about a product d when the market is in perfect competition and prices are high 8 What is it called when the government uses some tool other than money to allocate goods? a supply management b rationing c disequilibrium d resource allocation
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