23. Suppose prices for new homes have risen, yet sales of new homes have also risen. We can conclude that:?

A) the demand for new homes has risen.
B) the law of demand has been violated.
C) new firms have entered the construction industry.
D) construction firms must be facing higher costs.

24. Exhibit 4-7 Demand and supply schedules for movie tickets
Price Quantity
Demanded Quantity
200 500
8 240 470
6 370 420
4 390 390
2 410 310

In Exhibit 4-7, the equilibrium price of a movie ticket is:
A) .
B) .
C) .
D) .
E) .

25. If the equilibrium price of natural gas is per thousand cubic feet and a price ceiling is imposed at per thousand cubic feet, the result will be:
A) a surplus of natural gas.
B) a shortage of natural gas.
C) an accumulation of inventories of unsold gas.
D) None of these.

26. Exhibit 4-9 Data on supply and demand
Price Quantity
Demanded Quantity
.00 100 300
1.50 150 250
1.00 200 200
0.50 250 150

In Exhibit 4-9 the equilibrium price and quantity in the market are:
A) .50, 200.
B) .50, 300.
C) .00, 100.
D) .00, 200.

27. An externality is:
A) always a benefit to the recipient.
B) always a detriment to the recipient.
C) an activity that occurs in a business which is unknown to management.
D) unintended benefits or costs imposed on third parties as a result of economic activity.
E) an act, caused by a firm located in this country, which has an effect on a person in a foreign country.

28. Which of the following is an example of a negative externality?
A) A Japanese company begins to produce cars, which causes American workers to lose their jobs.
B) An employee of a chemical company spills acid on his arm, causing severe damage.
C) John plants fruit trees in his front yard, which attracts bees, which sting neighbor Mary.
D) Sally buys coffee at McDonald’s, spills some on her, and burns her arm.
E) Jack attempts to fix his roof, falls off, and breaks his leg.

29. If a chemical factory causes noxious fumes to be emitted in the neighborhood, a third party would be:
A) workers at the factory.
B) factory managers.
C) chemical customers.
D) local homeowners.
E) owners of the factory.

30. Externalities are unintended costs or benefits that are imposed on unsuspecting people and that result from:
A) poor planning.
B) intentional damages.
C) excessive costs.
D) excessive losses.
E) the economic activity of others.

2 Responses to “23. Suppose prices for new homes have risen, yet sales of new homes have also risen. We can conclude that:?”

  1. Glenn S Says:


    Real Estate Guy, quit cheating by looking on my paper for the answer!

  2. real estate guy Says: