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1. | High prices are signals for producers to produce __________and for buyers to buy __________. .
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| A) more; the same amount
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| B) the same amount; less
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| C) less; more
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| D) more; less
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2. | Problems regarding fairness, high administrative costs, and diminished incentives to work and produce can be the result of __________. .
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| A) nonprice allocation systems
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| B) price allocation systems
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| C) supply
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| D) demand
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3. | Advantages of using __________to allocate goods and services include freedom of choice, no administrative costs, neutrality, flexibility, and efficiency.
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| A) tariffs
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| B) prices
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| C) rationing
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| D) marginal product
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4. | Economist often use a(n) __________, a set of assumptions and/or relationships that can be listed in a table, illustrated with a graph, or even stated algebraically, to help analyze behavior and predict outcomes.
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| A) cost-benefit analysis
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| B) economic model
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| C) decision making grid
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| D) variable proportion model
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5. | In a competitive market, if the price is too high, a temporary __________appears until the price goes down.
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| A) shortage
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| B) price ceiling
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| C) surplus
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| D) price floor
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6. | The actual price changes in any given market are likely to be greater if both supply and demand are __________.
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| A) cross elastic
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| B) unit elastic
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| C) elastic
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| D) inelastic
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7. | A __________is a check sent to producers that makes up the difference between the actual market price and the target price.
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| A) ration coupon
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| B) deficiency payment
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| C) target payment
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| D) market coupon
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8. | If the fixed price is a __________, as in the case of rent controls, a shortage usually appears for as long as the price remains fixed below the equilibrium.
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| A) price ceiling
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| B) price floor
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| C) price surplus
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| D) fixed shortage
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9. | When economists say "markets talk," they mean _____________.
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| A) deficiency payments are needed
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| B) prices are too low
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| C) prices in markets move up or down significantly
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| D) price floors prevent markets from reaching equilibrium
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