Question : 41) Auctions in recent years have resulted in higher prices : 1245038

41) Auctions in recent years have resulted in higher prices paid for letters written by John Wilkes Booth than those written by Abraham Lincoln. What is a reason for this difference in price?

A) There is a surplus of letters written by Booth and a shortage of letters written by Lincoln.

B) Many people are more fascinated by villains and anti-heroes than by heroic figures.

C) There are more letters available for collectors to buy that were written by Lincoln than there are letters that were written by Booth.

D) Booth was a well-known actor; the demand for his letters rose as wealthy actors attempted to buy them.

42) At market equilibrium

A) demand equals supply.

B) quantity demanded equals quantity supplied.

C) surpluses are greater than shortages.

D) shortages are greater than surpluses.

43) At a product’s equilibrium price

A) anyone who needs the product will be able to buy the product, regardless of ability to pay.

B) the federal government will provide the product to anyone who cannot afford it.

C) not all sellers who are willing to accept the price will find buyers for their products.

D) any buyer who is willing and able to pay the price will find a seller for the product.

44) Hurricane Katrina damaged a large portion of refining and pipeline capacity when it swept through the Gulf coast states in August 2005. As a result of this, many gasoline distributors were not able to maintain normal deliveries. At the pre-hurricane equilibrium price (i.e., at the initial equilibrium price), we would expect to see

A) a surplus of gasoline.

B) the quantity demanded equal to the quantity supplied.

C) a shortage of gasoline.

D) an increase in the demand for gasoline.

45) Assume there is a surplus in the market for hybrid automobiles. Which of the following statements correctly describes this situation?

A) The supply of hybrid automobiles is greater than the demand for hybrid automobiles.

B) Some consumers will be unable to obtain hybrid automobiles at the market price and will have an incentive to offer to buy the product at a higher price.

C) The price of hybrid automobiles will fall in response to the surplus; as the price falls the quantity demanded will increase and the quantity supplied will decrease.

D) the surplus will cause an increase in the equilibrium price of hybrid automobiles.

46) Which of the following describes a characteristic of a perfectly competitive market?

A) There are many buyers but few sellers.

B) There are many sellers but few buyers.

C) There are many buyers and sellers.

D) Equilibrium is achieved when demand for the product sold in the market equals the supply.

47) If the quantity demanded for a product exceeds the quantity supplied, the market price will rise until

A) the quantity demanded equals the quantity supplied. The product will then no longer be scarce.

B) quantity demanded equals quantity supplied. The equilibrium price will then be greater than the market price.

C) only wealthy consumers will be able to afford the product.

D) quantity demanded equals quantity supplied. The market price will then equal the equilibrium price.

48) Which of the following is evidence of a shortage of chocolate?

A) Firms lower the price of chocolate.

B) The price of chocolate is raised in order to increase sales.

C) The equilibrium price of chocolate falls due to a decrease in demand.

D) The quantity of chocolate demanded is greater than the quantity supplied.

49) Even when the demand for one good is high, the price of the good is also affected by supply. The textbook illustrates this by comparing the price of two items that were auctioned on the same day. Which of the following describes the results of the auction?

A) A letter written by Abraham Lincoln sold for a higher price than a letter written by John Wilkes Booth.

B) A letter written by Abraham Lincoln was sold for a higher price than a letter written by Adam Smith.

C) A letter written by John Wilkes Booth sold for a higher price than a letter written by Lee Harvey Oswald.

D) A letter written by John Wilkes Booth sold for a higher price than a letter written by Abraham Lincoln.

50) If the demand for letters written by Abraham Lincoln is higher than the demand for letters written by John Wilkes Booth, what would have to be true for the market equilibrium prices for these letters to be equal?

A) The supply of Lincoln letters would have to be less than the supply of Booth letters.

B) The supply of Booth letters would have to be less than the supply of Lincoln letters.

C) The supply of Lincoln letters and the supply of Booth letters would have to be equal.

D) If the demand for Lincoln letters is greater than the demand for Booth letters, the market equilibrium price for Lincoln letters will always be greater than the market equilibrium price for Booth letters.