Question 1

Exhibit 5-1
 
-Refer to Exhibit 5-1,which shows supply and demand for freeway space at both 8a.m.and ________ at 11 p.m.

Accepted Answer

D

Question 2

If the purchase and sale of a currently illegal drug (for example,marijuana)were decriminalized,economists would expect

Accepted Answer

When the purchase and sale of a currently illegal drug is decriminalized, it is likely to lead to an increase in demand and supply of the drug. This is because the legal risks associated with the production, sale, and use of the drug would be reduced, leading to a lower price and greater accessibility. As a result, more people would be inclined to use the drug, while suppliers would be incentivized to increase the amount of the drug available in the market.

Question 3

Exhibit 5-2
 
-Refer to Exhibit 5-2.If the tuition is set at $40,there will need to be some kind of non-price rationing device used for

Accepted Answer

If the tuition is set at $40, both 8 a.m. classes and 10 a.m. classes are oversubscribed, meaning that there is more demand than supply. This necessitates some form of non-price rationing device to allocate spots in the classes among students, such as a lottery system or priority registration based on major or academic standing. Therefore, both choices A and B require non-price rationing, and the best answer is C.

Question 4

If the government legalized the purchase and sale of marijuana,the equilibrium quantity would _________ and the price would ________ if the supply of marijuana increased by _______ than the demand for marijuana increased.

Accepted Answer

If the supply of marijuana increased more than the demand for it, the equilibrium quantity would rise because there would be more supply to meet the demand. However, the increased supply would cause the price to fall because suppliers would have to lower their prices to sell their excess supply. Therefore, choice C (rise in quantity, fall in price) is the best option.

Question 5

Exhibit 5-1
 
-Refer to Exhibit 5-1,which shows supply and demand for freeway space at both 8a.m.and 11 p.m.Suppose that the government decides to set the money price of driving on the freeway at zero,but creates programs that encourage drivers to carpool.If the carpooling program is sufficiently successful to eliminate the shortage of freeway space at 8 a.m.,graphically the result of the increase in carpooling would be a

Accepted Answer

The carpooling program reduces the demand for freeway space at 8 a.m., shifting the demand curve leftward to match the lower demand level seen at 11 p.m.

Question 6

A toll of $1 per car is imposed on a road regardless of time of day.If the toll creates equilibrium travel flows at the busiest time of day,it will create a __________ at all other times.

Accepted Answer

At times other than the busiest, demand for road space decreases, leading to a surplus of space since the toll deters some drivers who might otherwise use the road when it is less congested.

Question 7

Exhibit 5-1
 
-Refer to Exhibit 5-1,which shows supply and demand for freeway space at both 8a.m.and 11 p.m.A toll of P? creates __________ at 8 a.m.and __________ at 11 p.m.

Accepted Answer

At 8 a.m., the demand for freeway space is high, leading to a shortage when a toll is imposed. At 11 p.m., demand is lower, resulting in a surplus of freeway space with the same toll.

Question 8

When congestion occurs on the freeway (because of a shortage of freeway space),the economist would most likely explain this by saying that it is because

Accepted Answer

The economist would explain that congestion occurs because the price of driving on the freeway is below the equilibrium price. This means that there is excess demand for freeway space, resulting in congestion.

Question 9

The demand for seats in 10 a.m.classes at the university is higher than the demand for seats in 8 a.m.classes.The supply of seats is fixed.If the university can only charge a single price and wishes to maximize the total number of seats purchased during the day,it should set the price

Accepted Answer

The answer of The demand for seats in 10 a.m.classes...

Question 10

If the purchase and sale of marijuana becomes legalized

Accepted Answer

The answer of If the purchase and sale of marijuana...

Question 11

Colleges and universities use such things as grade point averages and standardized test scores as

Accepted Answer

Colleges and universities use GPA and standardized test scores as non-price rationing devices in their admissions process. This helps them to manage the number of students that are admitted and ensure that those who are admitted meet certain academic standards.

Question 12

Exhibit 5-1
 
-Refer to Exhibit 5-1,which shows supply and demand for freeway space at both 8a.m.and 11 p.m.Which toll creates equilibrium at 11 p.m.?

Accepted Answer

At 11 p.m., demand for freeway space is typically lower, so a toll of 0 can create equilibrium as the supply of freeway space meets the lower demand without needing a toll to regulate it.

Question 13

The demand for seats in 10 a.m.classes at the university is higher than the demand for seats in 8 a.m.classes.The supply of seats is fixed.If the university prices classes at the price required to achieve equilibrium at 10 a.m.,there will be

Accepted Answer

Since the demand for seats in 10 a.m. classes is higher than the demand for seats in 8 a.m. classes and the supply of seats is fixed, the university will price the classes to achieve equilibrium at 10 a.m. This means that the price of 10 a.m. classes will be higher than the price of 8 a.m. classes. As a result, there will be a surplus of seats in the 8 a.m. classes because the price will be higher than the equilibrium price, leading to a lower quantity demanded and a higher quantity supplied. Therefore, choice B is the best answer.

Question 14

Exhibit 5-2
 
-Refer to Exhibit 5-2.If the tuition is set at $60 there will be

Accepted Answer

At a price of $60, the quantity demanded is 20 (at 8 a.m.) and the quantity supplied is 10 (at 10 a.m.), leading to a shortage of 10.

Question 15

Since most colleges and universities charge the same tuition to every student regardless of what time students choose to take their classes,

Accepted Answer

A) Non-price rationing devices are necessary because when price does not vary to balance supply and demand, other methods must be used to allocate resources (in this case, seats in classes). D) It's logical that some classes (likely those in high demand or at more convenient times) will have too many students wanting to enroll (a shortage of seats), while less popular classes or those at less convenient times may not fill up (a surplus of seats).

Question 16

Exhibit 5-1
 
-Refer to Exhibit 5-1,which shows supply and demand for freeway space at both 8a.m. Graphically,the result of the increase in freeway space would be shown bya.m.and 11 p.m.Suppose that the government decides to set the money price of driving on the freeway at zero,but builds more freeways to eliminate the shortage of freeway space at 8

Accepted Answer

A rightward shift in the supply of freeway space curve would eliminate the shortage of freeway space at 8 a.m., leading to a lower equilibrium price and an increase in the quantity of freeway space consumed. This would be shown graphically by a shift of the supply curve to the right at 8 a.m., and an upward movement along the demand curve to the new equilibrium point where supply and demand intersect. It would also result in an increase in freeway space at 11 p.m. as shown in the graph.

Question 17

If more people join carpools and travel to work together

Accepted Answer

When more people join carpools and travel to work together, the demand for individual cars on the freeway decreases. This leads to a shift leftward in the demand curve for freeway space because there is less demand for it. The supply curve for freeway space remains unaffected.

Question 18

Exhibit 5-1
 
-Refer to Exhibit 5-1,which shows supply and demand for freeway space at both 8a.m.and 11 p.m.Which toll creates equilibrium at 8a.m.?

Accepted Answer

At 8 a.m., the demand for freeway space is higher, so a higher toll, P₂, is needed to reduce demand and reach equilibrium.

Question 19

The space on the freeway is fixed at any instant of time.A supply curve that shows this is

Accepted Answer

The space on the freeway cannot be changed in the short run, so the supply curve would be perfectly vertical.

Question 20

Exhibit 5-1
 
-Refer to Exhibit 5-1,which shows supply and demand for freeway space at both 8a.m.and 11 p.m.A toll of P? creates __________ at 8 a.m.and __________ at 11 p.m.

Accepted Answer

The answer of Exhibit 5-1
 
-Refer to Exhibit 5-1,which shows...

Quiz 5: Supply, Demand, and Price: Applications

Exhibit 5-1 -Refer to Exhibit 5-1,which shows supply and demand for freeway space at both 8a.m.and ________ at 11 p.m.

If the purchase and sale of a currently illegal drug (for example,marijuana) were decriminalized,economists would expect

Exhibit 5-2 -Refer to Exhibit 5-2.If the tuition is set at $40,there will need to be some kind of non-price rationing device used for

If the government legalized the purchase and sale of marijuana,the equilibrium quantity would ___ and the price would if the supply of marijuana increased by _ than the demand for marijuana increased.

A toll of $1 per car is imposed on a road regardless of time of day.If the toll creates equilibrium travel flows at the busiest time of day,it will create a __________ at all other times.

Exhibit 5-1 -Refer to Exhibit 5-1,which shows supply and demand for freeway space at both 8a.m.and 11 p.m.A toll of P? creates at 8 a.m.and at 11 p.m.

When congestion occurs on the freeway (because of a shortage of freeway space) ,the economist would most likely explain this by saying that it is because

The demand for seats in 10 a.m.classes at the university is higher than the demand for seats in 8 a.m.classes.The supply of seats is fixed.If the university can only charge a single price and wishes to maximize the total number of seats purchased during the day,it should set the price

If the purchase and sale of marijuana becomes legalized

Colleges and universities use such things as grade point averages and standardized test scores as

Exhibit 5-1 -Refer to Exhibit 5-1,which shows supply and demand for freeway space at both 8a.m.and 11 p.m.Which toll creates equilibrium at 11 p.m.?

The demand for seats in 10 a.m.classes at the university is higher than the demand for seats in 8 a.m.classes.The supply of seats is fixed.If the university prices classes at the price required to achieve equilibrium at 10 a.m.,there will be

Exhibit 5-2 -Refer to Exhibit 5-2.If the tuition is set at $60 there will be

Since most colleges and universities charge the same tuition to every student regardless of what time students choose to take their classes,

If more people join carpools and travel to work together

Exhibit 5-1 -Refer to Exhibit 5-1,which shows supply and demand for freeway space at both 8a.m.and 11 p.m.Which toll creates equilibrium at 8a.m.?

The space on the freeway is fixed at any instant of time.A supply curve that shows this is

Exhibit 5-1 -Refer to Exhibit 5-1,which shows supply and demand for freeway space at both 8a.m.and 11 p.m.A toll of P? creates at 8 a.m.and at 11 p.m.

Quiz 5: Supply, Demand, and Price: Applications

Exhibit 5-1 -Refer to Exhibit 5-1,which shows supply and demand for freeway space at both 8a.m.and ________ at 11 p.m.

If the purchase and sale of a currently illegal drug (for example,marijuana) were decriminalized,economists would expect

Exhibit 5-2 -Refer to Exhibit 5-2.If the tuition is set at $40,there will need to be some kind of non-price rationing device used for

If the government legalized the purchase and sale of marijuana,the equilibrium quantity would _________ and the price would ________ if the supply of marijuana increased by _______ than the demand for marijuana increased.

A toll of $1 per car is imposed on a road regardless of time of day.If the toll creates equilibrium travel flows at the busiest time of day,it will create a __________ at all other times.

Exhibit 5-1 -Refer to Exhibit 5-1,which shows supply and demand for freeway space at both 8a.m.and 11 p.m.A toll of P? creates __________ at 8 a.m.and __________ at 11 p.m.

When congestion occurs on the freeway (because of a shortage of freeway space) ,the economist would most likely explain this by saying that it is because

The demand for seats in 10 a.m.classes at the university is higher than the demand for seats in 8 a.m.classes.The supply of seats is fixed.If the university can only charge a single price and wishes to maximize the total number of seats purchased during the day,it should set the price

If the purchase and sale of marijuana becomes legalized

Colleges and universities use such things as grade point averages and standardized test scores as

Exhibit 5-1 -Refer to Exhibit 5-1,which shows supply and demand for freeway space at both 8a.m.and 11 p.m.Which toll creates equilibrium at 11 p.m.?

The demand for seats in 10 a.m.classes at the university is higher than the demand for seats in 8 a.m.classes.The supply of seats is fixed.If the university prices classes at the price required to achieve equilibrium at 10 a.m.,there will be

Exhibit 5-2 -Refer to Exhibit 5-2.If the tuition is set at $60 there will be

Since most colleges and universities charge the same tuition to every student regardless of what time students choose to take their classes,

If more people join carpools and travel to work together

Exhibit 5-1 -Refer to Exhibit 5-1,which shows supply and demand for freeway space at both 8a.m.and 11 p.m.Which toll creates equilibrium at 8a.m.?

The space on the freeway is fixed at any instant of time.A supply curve that shows this is

Exhibit 5-1 -Refer to Exhibit 5-1,which shows supply and demand for freeway space at both 8a.m.and 11 p.m.A toll of P? creates __________ at 8 a.m.and __________ at 11 p.m.

If the government legalized the purchase and sale of marijuana,the equilibrium quantity would ___ and the price would if the supply of marijuana increased by _ than the demand for marijuana increased.

Exhibit 5-1 -Refer to Exhibit 5-1,which shows supply and demand for freeway space at both 8a.m.and 11 p.m.A toll of P? creates at 8 a.m.and at 11 p.m.

Exhibit 5-1 -Refer to Exhibit 5-1,which shows supply and demand for freeway space at both 8a.m.and 11 p.m.A toll of P? creates at 8 a.m.and at 11 p.m.