Title: Applications of Supply and Demand
Course: Macro Quiz Test

Q: Price ceilings typically result in ________.
- excess supply
- price equilibrium
- shortages
A: shortages

Q: ________ are generally the result of price ceilings.
- Excess supply
- Price equilibrium
- Shortages
A: Shortages

Q: If the government sets a price ceiling of $8, there would be a(n):
- excess supply of 4 units.
- shortage of 8 units.
- shortage of 4 units.
A: shortage of 4 units.

Q: Refer to the figure below. If the government sets a price ceiling of $6,
- there would be a shortage of 14 units.
- there would be an excess supply of 6 units.
- consumers would demand 14 units.
A: consumers would demand 14 units.

Q: Refer to the figure below. If the government sets a price ceiling at $10, there would be a(n):
- excess supply of 32 units.
- excess supply of 80 units.
- shortage of 24 units.
A: shortage of 24 units.

Q: Refer to the figure below. If the government sets a price ceiling at $20, there would be a(n):
- excess supply of 22 units.
- excess shortage of 26 units.
- shortage of 20 units.
A: shortage of 20 units.

Q: Price ceilings attempt to make consumer prices ________.
- higher
- at equilibrium
- lower
A: lower

Q: The main reason price ceilings are set is so that consumer prices
- will be higher.
- will remain at equilibrium.
- will be lower.
A: will be lower.

Q: Refer to the figure below. If the government sets a price ceiling of $4, there would be a(n):
- excess supply of 4 units
- shortage of 8 units
- shortage of 5 units
A: shortage of 5 units

Q: Refer to the figure below. If the government sets a price ceiling of $8,
- there would be a shortage of 12 units.
- there would be an excess supply of 4 units.
- consumers would demand 12 units.
A: consumers would demand 12 units.

Q: A government decides to set a price ceiling on bread so that bread is affordable to the poor. The conditions of demand and supply are given in the table below. What is the equilibrium price before the price ceiling? What will the excess supply or the shortage be if the price ceiling is set at $2.40?

Price | Qd | Qs
$1.60 | 9,000 | 5,000
$2.00 | 8,500 | 5,500
$2.40 | 8,000 | 6,400
$2.80 | 7,500 | 7,500
$3.20 | 7,000 | 9,000
$3.60 | 6,500 | 11,000
$4.00 | 6,000 | 15,000
- $2.40; 1,600 shortage
- $2.80; 1,600 excess supply
- $2.80; 1,600 shortage
A: $2.80; 1,600 shortage

Q: A government decides to set a price ceiling on milk so that milk is affordable to the poor. The conditions of demand and supply are given in the table below. What will the excess supply or the shortage be if the price ceiling is set at $2.40? What is the equilibrium price before the price ceiling?

Price | Qd | Qs
$1.60 | 9,000 | 5,000
$2.00 | 8,500 | 5,500
$2.40 | 8,000 | 6,400
$2.80 | 7,500 | 7,500
$3.20 | 7,000 | 9,000
$3.60 | 6,500 | 11,000
$4.00 | 6,000 | 15,000
- 1,600 shortage; $2.40
- 1,600 excess supply; $2.80
- 1,600 shortage; $2.80
A: 1,600 shortage; $2.80

Q: A government decides to set a price ceiling on eggs so that eggs are affordable to the poor. The conditions of demand and supply are given in the table below. What will the excess supply or the shortage be if the price ceiling is set at $2.00?

Price | Qd | Qs
$1.60 | 9,000 | 5,000
$2.00 | 8,500 | 5,500
$2.40 | 8,000 | 6,400
$2.80 | 7,500 | 7,500
$3.20 | 7,000 | 9,000
$3.60 | 6,500 | 11,000
$4.00 | 6,000 | 15,000
- 3,000 excess supply
- 8,500 shortage
- 3,000 shortage
A: 3,000 shortage

Q: A government decides to set a price ceiling on potatoes so that potatoes are affordable to the poor. The conditions of demand and supply are given in the table below. What will the excess supply or the shortage be if the price ceiling is set at $2.00?

Price | Qd | Qs
$1.60 | 9,000 | 5,000
$2.00 | 8,500 | 5,500
$2.40 | 8,000 | 6,400
$2.80 | 7,500 | 7,500
$3.20 | 7,000 | 9,000
$3.60 | 6,500 | 11,000
$4.00 | 6,000 | 15,000
- 3,000 excess supply
- 8,500 shortage
- 3,000 shortage
A: 3,000 shortage

Q: A government decides to set a price ceiling on bread of $2.40 so that bread is affordable to the poor. The conditions of demand and supply are given in the table below. What will be the price and quantity of bread purchased?

Price | Qd | Qs
$1.60 | 9,000 | 5,000
$2.00 | 8,500 | 5,500
$2.40 | 8,000 | 6,400
$2.80 | 7,500 | 7,500
$3.20 | 7,000 | 9,000
$3.60 | 6,500 | 11,000
$4.00 | 6,000 | 15,000
- $2.40; 8,000
- $2.00; 7,000
- $2.40; 6,400
A: $2.40; 6,400

Q: A government decides to set a price ceiling on milk of $2.40 so that milk is affordable to the poor. The conditions of demand and supply are given in the table below. What will be the price and quantity of milk purchased?

Price | Qd | Qs
$1.60 | 9,000 | 5,000
$2.00 | 8,500 | 5,500
$2.40 | 8,000 | 6,400
$2.80 | 7,500 | 7,500
$3.20 | 7,000 | 9,000
$3.60 | 6,500 | 11,000
$4.00 | 6,000 | 15,000
- $2.40; 8,000
- $2.00; 7,000
- $2.40; 6,400
A: $2.40; 6,400

Q: Suppose the local government is concerned about the health of local school children, and for that reason imposes a price ceiling of $3 on yogurt. Based on the graph below, which of the following is true?
- The quantity demanded will be 3 yogurts.
- There will be a shortage of 5 yogurts.
- The quantity supplied will be 3 yogurts.
A: The quantity supplied will be 3 yogurts.

Q: Suppose the local government is concerned about the health of local school children, and for that reason imposes a price ceiling of $3 on yogurt. Based on the graph below, which of the following is true?
- The quantity supplied will be 4 yogurts.
- There will be a shortage of 3 yogurts.
- The quantity demanded will be 5 yogurts.
A: The quantity demanded will be 5 yogurts.

Q: Suppose, in the graph below, there is a price ceiling of $3. Then there is a shortage of:
- 3 units.
- 0 units.
- 6 units.
A: 6 units.

Q: Suppose, in the graph below, there is a price ceiling of $6. Then there is a shortage of
- 3 units.
- 6 units.
- 0 units.
A: 0 units.

Q: Suppose, in the graph below, there is a price ceiling of $4. Then there is a shortage of:
- 6 units.
- 0 units.
- 4 units.
A: 4 units.

Q: Suppose, in the graph below, there is a price ceiling of $5. Then there is a shortage of
- 3 units.
- 6 units.
- 2 units.
A: 2 units.

Q: The local government is concerned about poverty so it institutes a minimum wage of $9 per hour. If the demand and supply for labor are given in the graph, there will be
- a total of 3 workers supplied and no surplus workers.
- a total of 3 workers supplied with a shortage of 6 workers.
- a total of 9 workers supplied with a surplus of 6 workers.
A: a total of 9 workers supplied with a surplus of 6 workers.

Q: If a set price attempts to keep prices higher than the equilibrium price it is a(n)
- price ceiling.
- equilibrium price.
- price floor.
A: price floor.

Q: The federal minimum wage is an example of a
- price ceiling.
- rent control.
- price floor.
A: price floor.

Q: Price floors typically result in ________.
- excess demand
- quantity supplied equals quantity demanded
- excess supply
A: excess supply

Q: The local government is concerned about poverty so it institutes a minimum wage of $9 per hour. If the demand and supply for labor are given in the graph, there will be
- a surplus of 3 workers.
- a shortage of 6 workers.
- a surplus of 6 workers.
A: a surplus of 6 workers.

Q: A price floor attempts to keep prices ________.
- lower than the equilibrium price
- at the equilibrium price
- higher than the equilibrium price
A: higher than the equilibrium price

Q: Requiring that all employees get a minimum wage of $8.00 is an example of a
- price ceiling.
- rent control.
- price floor.
A: price floor.

Q: What is a the typical result of a price floor?
- excess demand
- quantity supplied equals quantity demanded
- excess supply
A: excess supply

Q: Supply and demand for bushels of wheat (millions) are shown in the following table. A $10.00 price floor would result in:

Price | Qd | Qs
$5.00 | 26 | 16
$6.00 | 24 | 18
$7.00 | 22 | 20
$8.00 | 21 | 21
$9.00 | 20 | 22
$10.00 | 19 | 23
$11.00 | 18 | 24
- a price of $8.00 and an excess supply of zero.
- a price of $9.00 and an excess supply of 2 million bushels.
- a price of $10.00 and an excess supply of 4 million bushels.
A: a price of $10.00 and an excess supply of 4 million bushels.

Q: Supply and demand for bushels of wheat (millions) are shown in the following table. A $10.00 price floor would result in:

Price | Qd | Qs
$5.00 | 26 | 16
$6.00 | 24 | 18
$7.00 | 22 | 20
$8.00 | 21 | 21
$9.00 | 20 | 22
$10.00 | 19 | 23
$11.00 | 18 | 24
- an excess supply of zero and a price of $8.00.
- an excess supply of 2 million bushels and a price of $9.00.
- an excess supply of 4 million bushels and a price of $10.00.
A: an excess supply of 4 million bushels and a price of $10.00.

Q: Refer to the figure below. If the government set a price floor of $80, the excess supply will be:
- 80.
- 28.
- 16.
A: 16.

Q: Refer to the figure below. If the government sets a price floor of $80, the price would be:
- $30 lower than the equilibrium price.
- The same as the equilibrium price.
- $30 higher than the equilibrium price.
A: $30 higher than the equilibrium price.

Q: If the government sets floor prices for wheat or corn that guarantee farmers an above-market price for that product, the most probable result would be what?
- more suppliers would leave the market
- the market would suffer shortages
- overproduction
A: overproduction

Q: Refer to the figure below. If the government set a price floor of $30, there would be
- excess supply of 16 units.
- excess supply of 12 units.
- zero excess supply.
A: zero excess supply.

Q: Supply and demand for bushels of wheat (millions) are shown in the following table. A $9.00 government mandated price floor would result in

Price | Qd | Qs
$5.00 | 26 | 16
$6.00 | 24 | 18
$7.00 | 22 | 20
$8.00 | 21 | 21
$9.00 | 20 | 22
$10.00 | 19 | 23
$11.00 | 18 | 24
- a shortage of 2 million bushels of wheat.
- zero excess supply.
- an excess supply of 2 million bushels of wheat.
A: an excess supply of 2 million bushels of wheat.

Q: Refer to the figure below. If the government set a price ceiling of $80, the amount bought and sold will be:
- 12.
- 28.
- 20.
A: 20.

Q: A price ceiling creates ________ when it is set ________ the equilibrium price.
- excess demand; above
- excess supply; below
- excess demand; below
A: excess demand; below

Q: A price floor creates ________ when it is set ________ the equilibrium price.
- excess demand; below
- excess supply; below
- excess supply; above
A: excess supply; above

Q: If there is a greater quantity supplied than the quantity demanded, in other words, an excess supply of a good or service you are most likely dealing with a
- price ceiling set below the equilibrium price.
- price floor set below the equilibrium price.
- price floor set above the equilibrium price.
A: price floor set above the equilibrium price.

Q: A price ceiling when it is set ________ the equilibrium price creates ________.
- above; excess demand
- below; excess supply
- below; excess demand
A: below; excess demand

Q: A price floor when it is set ________ the equilibrium price creates ________.
- below; excess demand
- below; excess supply
- above; excess supply
A: above; excess supply

Q: How does a price floor set above the equilibrium price affect quantity demanded and quantity supplied?
- It results in a greater quantity supplied than the quantity demanded, otherwise known as a shortage.
- It results in a smaller quantity supplied than the quantity demanded, otherwise known as a shortage.
- It results in a greater quantity supplied than the quantity demanded, otherwise known as excess supply.
A: It results in a greater quantity supplied than the quantity demanded, otherwise known as excess supply.

Q: If the government set a price ceiling of $40, there would be:
- a shortage (or excess supply) of about 12 units
- a surplus (or excess demand) of about 12 units
- a surplus (or excess demand) of about 8 units
A: a surplus (or excess demand) of about 8 units

Q: Refer to the figure below. If the government set a price ceiling of $40, there would be:
- 12 units sold.
- 28 units sold.
- 16 units sold.
A: 16 units sold.

Q: California last summer was devastated by wildfires that have now created mudslides with the winter rain. This winter highway 1 was closed for weeks as they removed the mud. Because of the closed main road, milk was in greater demand but short on supply. The government put a temporary price ceiling on the cost of milk at $4. If the equilibrium for milk was at $7, what do you think was the result of the price ceiling?
- The equilibrium price dropped to the price ceiling and the supply met the demanded quantity.
- People continued to uphold the law and pay the $4 for milk and there was greater quantity supplied than demanded.
- There was greater demand than supplied and people began a black market for selling milk.
A: There was greater demand than supplied and people began a black market for selling milk.

Q: Alabama this winter was socked in with snow which closed highways, stores and schools for weeks. Because of the road closures, soup was in greater demand but short on supply. The government put a temporary price ceiling on the cost of soup at $1. If the equilibrium for soup was at $5, what do you think happened?
- The equilibrium price dropped to the price ceiling and the supply met the demanded quantity.
- People continued to uphold the law and pay the $1 for soup and there was greater quantity supplied than demanded.
- There was greater demand than supplied and people began a black market for selling and delivering soup.
A: There was greater demand than supplied and people began a black market for selling and delivering soup.

Q: Country A has great expertise in the production of planes and produces a large quantity of planes while country B has expertise in the production of automobiles and produces large quantities of cars. When the two countries trade planes for automobiles
- both countries improve allocative efficiency because they will both have the same number of cars and automobiles after trade.
- only country B benefits because through trade they can acquire planes that are more valuable than automobiles.
- both countries improve allocative efficiency because they can now consume a more desirable combination of goods and services (planes and cars) through trade.
A: both countries improve allocative efficiency because they can now consume a more desirable combination of goods and services (planes and cars) through trade.

Q: The country of Zanabar produces computers and produces them in a large quantity while the country of Abathana expertly produces cell phones in large quantities. In order for both countries to consume more desirable combinations of goods and services (computers and cell phones) they should
- allow only Abathana to trade a small quantity of cell phones for computers since cell phones are worth more.
- trade until each country has exactly equal number of cell phones and computers which will then create efficiency.
- freely trade computers and cell phones to meet improve allocative efficiency.
A: freely trade computers and cell phones to meet improve allocative efficiency.

Q: Paul has two tickets to the next Texan game while Bella has two tickets to the next Rockets game. Bella values the Rockets tickets at $200 while she values the Texans tickets at $250. Paul values the Rockets tickets at $250 and the Texans tickets at $150. Allocative efficiency can be improved for Paul and Bella if
- Paul buys the Rockets tickets from Bella and keeps the Texan tickets.
- Bella buys the Rockets tickets from Paul and keeps the Rockets tickets.
- Paul and Bella exchange tickets for a price agreeable to both.
A: Paul and Bella exchange tickets for a price agreeable to both.

Q: Sanjai has two tickets to a P!nk concert this summer in Houston. Heather has two tickets to the Justin Bieber concert this summer. Heather values the P!nk tickets at $250 while she values the Bieber tickets at $150. Sanjai values the Bieber tickets at $300 and the P!nk Tickets at $175. If Heather and Sanjai want to improve their allocative efficiency,
- Heather can buy the P!nk tickets from Sanjai and keep the Bieber tickets.
- Sanjai can buy the Bieber tickets from Heather and keep the P!nk tickets.
- Heather and Sanjai exchange the tickets for a price they agree upon to satisfy both.
A: Heather and Sanjai exchange the tickets for a price they agree upon to satisfy both.

Q: Countries or individuals will keep trading computers for phones until
- each country acquires as many computers and phones as they can.
- the additional benefit from the last traded phone will equal the additional benefit from the last computer.
- the value of each additional phone and computer is equal for both countries or individuals.
A: the value of each additional phone and computer is equal for both countries or individuals.

Q: Individuals and countries will continue to trade airplanes for cars until
- each country acquires as many airplanes and cars as they can.
- the additional benefit from the last traded car will equal the additional benefit from the last plane.
- the value of each additional airplane and car is equal for both countries or individuals.
A: the value of each additional airplane and car is equal for both countries or individuals.

Q: Isabel experiences diminishing marginal utility when
- the price of each additional hat she purchases falls when she gets volume discounts.
- the value of the hats she purchased start to fall as they wear out over time.
- the value to her of each additional hat she purchases start falling.
A: the value to her of each additional hat she purchases start falling.

Q: When Ian experiences diminishing marginal utility when buying shirts,
- the price of each additional shirt he purchases falls when he gets volume discounts.
- the value of the shirt he purchased start to fall as they wear out over time.
- the personal value of each additional shirt he purchases starts to fall.
A: the personal value of each additional shirt he purchases starts to fall.

Q: Which of the following describes consumer surplus?
- The difference between an item's production cost and the amount paid by consumers.
- The amount a seller is paid for a good minus the seller's actual cost.
- The social surplus minus producer surplus.
A: The social surplus minus producer surplus.

Q: If you were describing consumer surplus, you would say it is
- the difference between an item's production cost and the amount paid by consumers.
- the amount a seller is paid for a good minus the seller's actual cost.
- the social surplus minus producer surplus.
A: the social surplus minus producer surplus.

Q: When describing consumer surplus, you would say it is the extra benefit consumers receive when they ________.
- pay more than they would have been willing to pay
- pay exactly what they would have been willing to pay
- pay less than they would have been willing to pay
A: pay less than they would have been willing to pay

Q: Consumer surplus is best described as the extra benefit consumers receive when they ________.
- pay more than they would have been willing to pay
- pay exactly what they would have been willing to pay
- pay less than they would have been willing to pay
A: pay less than they would have been willing to pay

Q: Which of the following represents consumer surplus?
- B
- B+A
- A
A: A

Q: Look at the graph provided. What area on the graph represents consumer surplus?
- B
- B+A
- A
A: A

Q: Look at the graph provided below. Consumer surplus is:

and has an upward slope. D1 starts at approximately (0,16) and has a downward slope. The two lines cross at the point (30,14))
- $60
- $120
- $30
A: $30

Q: Refer to the figure below. Consumer surplus is:
- $60
- $120
- $30
A: $30

Q: Which area represents producer surplus in the following figure?
- Area A
- Area B
- Area C
A: Area C

Q: In the following figure, which area represents producer surplus?
- A
- B+A
- B
A: B

Q: Refer to the figure below (remember to use the formula for a triangle to find the amount of surplus). What is the producer surplus?
- $400
- $60
- $180
A: $180

Q: In the following figure, which area represents producer surplus?
- Area A
- Area B
- Area C
A: Area C

Q: Which of the following represents producer surplus?
- A
- B+A
- B
A: B

Q: Refer to the figure below. What is producer surplus?
- $420
- $60
- $180
A: $180

Q: If Von’s company can produce hang gliders for $10,000 but Valeria is willing to pay $15,000 and finds the model she wants and pays $15,000 for it from his company. Von’s company has
- a consumer surplus of $5,000.
- a social surplus of $15,000.
- a producer surplus of $5,000.
A: a producer surplus of $5,000.

Q: The Kreidler Kids company can produce swing sets for $1,000. Kendra wants a new swing set for her children and will pay $1,500 for it. Kendra finds the swing set she wants and pays $1,500 for it from the Kreidler Kids company. The Kreidler Kids company has
- a consumer surplus of $500.
- a social surplus of $1,500.
- a producer surplus of $500.
A: a producer surplus of $500.

Q: Social surplus is ________.
- consumer surplus minus producer surplus
- producer surplus minus consumer surplus
- the sum of consumer surplus and producer surplus
A: the sum of consumer surplus and producer surplus

Q: If the total surplus in a market with no government intervention is $500 and consumer surplus is $200, producer surplus is ________.
- $700
- $250
- $300
A: $300

Q: If the consumer surplus is $1000 and the producer surplus is $300, social surplus is ________.
- $700
- -$700
- $1300
A: $1300

Q: Refer to the figure below. What is total surplus area?
- $105
- $420
- $210
A: $210

Q: The sum of consumer surplus and producer surplus is know as ________.
- consumer surplus
- producer surplus
- social surplus
A: social surplus

Q: If the total surplus in a market is $5000, and there is has no government intervention, but the producer surplus is $200, consumer surplus is ________.
- $700
- $250
- $300
A: $300

Q: If the producer surplus is $1000 and the consumer surplus is $300, social surplus is ________.
- $700
- -$700
- $1300
A: $1300

Q: What is total surplus area from the figure below?
- $105
- $420
- $210
A: $210

Q: In a market with an upward sloping supply curve and a downward sloping demand curve, a price floor ________.
- does not affect surplus
- increases total social surplus
- creates deadweight loss
A: creates deadweight loss

Q: ________ describes the loss in social surplus that occurs when the economy produces at an inefficient quantity.
- Consumer surplus
- Producer surplus
- Deadweight loss
A: Deadweight loss

Q: Compare a market operating at a quantity lower than equilibrium (ie. a price floor) with the same market operating at the equilibrium quantity. Which of the following statements are true?
- It is unclear if the consumer surplus is greater or less at the market operating below equilibrium.
- A market operating below equilibrium will transfer some producer surplus to consumers.
- A market operating below equilibrium will transfer some consumer surplus to producers.
A: A market operating below equilibrium will transfer some consumer surplus to producers.

Q: Which of the following statements are true if you are comparing a market that is operating at a quantity lower than equilibrium (ie. a price floor) with the same market operating at the equilibrium quantity?
- It is unclear if the consumer surplus is greater or less at the market operating below equilibrium.
- A market operating below equilibrium will transfer some producer surplus to consumers.
- A market operating below equilibrium will transfer some consumer surplus to producers.
A: A market operating below equilibrium will transfer some consumer surplus to producers.

Q: A price ceiling causes consumer surplus to
- decrease.
- move to equilibrium.
- increase.
A: increase.

Q: An increase in consumer surplus is caused by
- a move to equilibrium.
- a price floor.
- a price ceiling.
A: a price ceiling.

Q: Consider the market for purple potatoes below and assume that a price ceiling of $30 is imposed by the government. Calculate the deadweight loss:
- The deadweight loss is $2500.
- The deadweight loss is $2000.
- The deadweight loss is $5000.
A: The deadweight loss is $5000.

Q: Consider the market for purple potatoes below and assume that a price ceiling of $30 is imposed by the government. While calculating the deadweight loss, what is the loss of consumer surplus?
- The loss of consumer surplus is $5000.
- The loss of consumer surplus is $2000.
- The loss of consumer surplus is $2500.
A: The loss of consumer surplus is $2500.

Q: If the government increases the minimum wage, the social surplus would
- stay the same.
- increase.
- decrease.
A: decrease.

Q: An increase in minimum wage causes the social surplus to
- stay the same.
- increase.
- decrease.
A: decrease.

Q: Assume that currently banks pay 2% interest on money that customers deposit in savings accounts. As the overall amount of money held in savings accounts increases, in financial markets
- the demand for savings increases.
- both supply and demand are increasing.
- the supply of savings increases.
A: the supply of savings increases.

Q: As the number of people holding college degrees increases, assuming the demand for college educated labor stays constant, the wages of college educated people would
- increase as the supply of college educated labor increases.
- increase as the demand for jobs increases.
- decrease as the supply of college educated labor increases.
A: decrease as the supply of college educated labor increases.

Q: As the information technology advances and consumers buy products requiring more and more technology, the wages of people with high level programming and other technical skills would
- increase as the supply of high tech skills increases.
- decrease as the supply of high tech skills increases.
- increase as the demand for high tech skills increases.
A: increase as the demand for high tech skills increases.

Q: After a devastating hurricane, households try to secure loans to repair and rebuild. Other things equal, this would lead to
- an increase in interest rates of home repair loans as the supply for those loans decreased.
- a decrease in interest rates of home repair loans as the supply for those loans increased.
- an increase in interest rates of home repair loans as the demand for those loans increased.
A: an increase in interest rates of home repair loans as the demand for those loans increased.

Q: After earthquakes hit the California coast and damaged tens of thousands of cars, there was a growing demand and need for automotive repair, glass replacement, dent repair and repainting. In the labor market for car repair, the demand would be represented by
- car owners wanting car repairs and supply represented by automotive and glass repair and replacement companies.
- body shop workers looking for work and supply is represented by the automotive body shops and glass repair companies providing jobs.
- automotive body shops and glass repair and replacement companies, and supply represented by the automotive workers
A: automotive body shops and glass repair and replacement companies, and supply represented by the automotive workers

Q: After a tsunami washed over Hilo, Hawaii and surrounding towns it damaged thousands of boats, there was a growing demand for boat repair, glass replacement, dent repair and repainting. In the labor market for boat repair, the demand would be represented by
- boat owners wanting boat repairs and supply represented by boat body shops and glass repair and replacement companies.
- boat body shop workers looking for work and supply is represented by the boat body shops and glass repair companies providing jobs.
- boat body shops and glass repair and replacement companies, and supply represented by the boat workers.
A: boat body shops and glass repair and replacement companies, and supply represented by the boat workers.

Q: Advances in tax software such as TurboTax influenced the income tax preparer market in the following way:
- The supply for income tax preparers (the person who calculates and prepares your income tax return) fell and as a result, there are fewer tax preparer jobs.
- The demand for income tax preparers (the person who calculates and prepares your income tax return) fell and as a result, the wages for tax preparer has increased
- The demand for income tax preparers (the person who calculates and prepares your income tax return) fell and as a result, there are fewer tax preparer jobs.
A: The demand for income tax preparers (the person who calculates and prepares your income tax return) fell and as a result, there are fewer tax preparer jobs.

Q: Advances in information technology reduced the cost of production of computers and other electronic devices. As a result,
- the supply of computers and electronic devices decreased and the price of these devices fell.
- the demand for computers and electronic devices increased and the price of these devices fell.
- the supply of computers and electronic devices increased and the price of these devices fell.
A: the supply of computers and electronic devices increased and the price of these devices fell.

Q: Online mortgage companies have been growing in numbers and size, and as a result, other things equal, traditional banks have to
- increase the interest on their mortgage loans as the demand for all mortgage loans increased.
- decrease the interest on their mortgage loans as the supply for all mortgage loans decreased.
- decrease the interest on their mortgage loans as the demand for traditional mortgage loans decreased.
A: decrease the interest on their mortgage loans as the demand for traditional mortgage loans decreased.

Q: Assume that currently banks pay 2% interest on money customers deposit in savings accounts. As the overall amount of money held in savings accounts increases, in financial markets, the interest rate paid on savings would
- increase.
- remain unaffected.
- decrease.
A: decrease.

Q: What effect over the last decade, has the increasingly efficient and inexpensive technology of online college courses had on the college textbook market?
- The supply for college textbooks has increased as a result there are fewer textbook publishing companies.
- The demand for textbooks has declined resulting in publishing companies increasing their demand of textbook editor jobs.
- The demand for physical textbooks have steadily decreased, and as a result more publishing companies are having less demand for high skilled textbook editor jobs.
A: The demand for physical textbooks have steadily decreased, and as a result more publishing companies are having less demand for high skilled textbook editor jobs.

Q: As the new technology of large capacity paint sprayers for house painting arrived in the market, what effect did it have on the house painting labor market?
- Painting companies supply of low skilled house painters decreased and the equilibrium price of wages for low skilled painters increased.
- The painting companies demand for higher skilled house painters decreased and the equilibrium price of wages for high skilled painters increased.
- Painting companies demand for low skilled house painters decreased and the equilibrium price of wages for low skilled painters decreased.
A: Painting companies demand for low skilled house painters decreased and the equilibrium price of wages for low skilled painters decreased.

Q: Many people have larger amounts of debt in America than before, and people in the market have become hesitant to take loans out for new cars. All other things being equal, what would car dealership do with their financing in this new market environment?
- They would increase the supply of car loans and increase the equilibrium price (interest rate) to remain competitive.
- They would decrease the supply of car loans and increase the equilibrium price (interest rate) to attract more car buyers.
- Dealership financing would decrease the supply of car loans and decrease the equilibrium price (interest rate) to make their car loans more attractive for people.
A: Dealership financing would decrease the supply of car loans and decrease the equilibrium price (interest rate) to make their car loans more attractive for people.

Q: The current economy is strong and many people are feeling confident about their future and ability to pay off debt. Because of this they are taking on more bank loans for things like new cars, renovating their homes, or buying new homes. Using the four step process with this type of market, what will banks most likely do with their loans?
- They would increase the supply of loans and decrease the interest rate.
- They would to decrease the quantity supplied of loans and decrease the interest rate.
- They would increase the quantity supplied of loans and increase the interest rate.
A: They would increase the quantity supplied of loans and increase the interest rate.