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Modern Principles of Economics 3rd Edition Cowen Test Bank 1
Modern Principles of Economics 3rd Edition Cowen Test Bank 1
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4. A price ceiling creates a ________ when it is set ________.
A) surplus; below the equilibrium price
B) surplus; above the equilibrium price
C) shortage; below the equilibrium price
D) shortage; above the equilibrium price
5. (Figure: Price Ceiling) Refer to the figure. When a price ceiling of $10 is instituted by
the government, consumers are able to buy how many units of the product?
A) 290 units
B) 310 units
C) 270 units
D) 40 units
6. (Figure: Price Ceiling) Refer to the figure. A price ceiling of $10 results in a:
A) shortage of 270 units.
B) shortage of 40 units.
C) surplus of 270 units.
D) surplus of 40 units.
7. (Figure: Price Ceiling) Refer to the figure. If a price ceiling were set at $12, there would
be a:
A) shortage of 50 units.
B) surplus of 40 units.
C) shortage of 0 units.
D) surplus of 20 units.
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8. Which statement is NOT an effect of a price ceiling?
A) surpluses
B) misallocation of resources
C) loss of gains from trade
D) wasteful lineups
9. When the maximum legal price is below the market price we say that there is a price:
A) floor.
B) stabilization.
C) support.
D) ceiling.
10. Economists call the maximum legal price a price ceiling because the price:
A) cannot legally go lower than the ceiling.
B) cannot legally go higher than the ceiling.
C) must match the legally established ceiling price.
D) All of these answers are correct.
11. Price ceilings would create all of the following effects EXCEPT:
A) shortages.
B) reductions in product quality.
C) a misallocation of resources.
D) maximum gains from trade.
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12. (Figure: Price Controls) Refer to the figure. Which price control would cause a shortage
of 20 units of the good?
A) a price ceiling of $10
B) a price floor of $10
C) a price ceiling of $6
D) a price floor of $6
13. (Figure: Price Controls) Refer to the figure. If the government imposes a price ceiling in
this market at a price of $6, the result would be a:
A) surplus of 20 units.
B) surplus of 10 units.
C) shortage of 20 units.
D) shortage of 10 units.
15. When the maximum legal price is set below the market price then:
I. a price floor is in effect.
II. a shortage will develop.
III. there will be lost gains from trade.
IV. there will be no impact on the quantity demanded or supplied.
A) I and II only
B) I, II, and III only
C) II and III only
D) IV only
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17. When a price ceiling is in effect:
A) suppliers get too strong a signal from demanders about their needs.
B) demanders have no incentive to signal their needs to suppliers.
C) all of demanders' needs are met at the lower price, so there is no need to signal
anything to suppliers.
D) demanders cannot signal their needs to suppliers.
18. In Ancient Egypt, the “Bronze Law” set maximum prices for wages, preventing them
from rising above what rulers perceived as the minimum needed to survive. If this was
10¢ a day for a porter (someone who carries things short distances) and the market wage
was 8¢ a day, which of the following would be a plausible consequence of this law?
A) Porters would travel less quickly than they otherwise would.
B) Porters would transport items they normally would not.
C) Unemployment for porters would decrease.
D) Nothing unusual would happen.
19. In the case of a binding price ceiling, the price paid in the market will be:
A) more than the free market equilibrium price.
B) less than the free market equilibrium price.
C) equal to the free market equilibrium price.
D) unable to be compared with the free market equilibrium price.
20. In the case of a nonbinding price ceiling, the price paid in the market will be:
A) more than free market equilibrium price.
B) less than free market equilibrium price.
C) equal to free market equilibrium price.
D) unable to be compared with free market equilibrium price.
Page 5
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resulted in a different hypothesis. Its evanescent character indicated
combustion. Its brilliancy was marked for a few hours—a few nights at
most—then it faded, and was gone. Astronomers believe that it was a
burning world. Our own earth is a globe of living fire. Only a thin crust
intervenes between us and this fearful interior. Ever and anon, in the
rumbling earthquake, or the sublime volcano, it gives us warning of its
presence. These are themselves gospel messengers. They say if we
would but hear them—“Prepare to meet thy God.” The intimations of
science confirm those of Revelation: “The heavens and the earth ... are
kept in store, reserved unto the fire against the Day of Judgment and
perdition of ungodly men.” What was true of Sodom and Gomorrah—
what was true of the earth we live on—is true of the human soul. It
contains within itself the instruments of its own punishment. There is a
fearful significance in the words of the Apostle: “After thy hardness and
impenitent heart treasureth up to thyself wrath against the day of wrath.”
Men gather, with their own hands, the fuel to feed the flame that is not
quenched; they nurture in their own bosoms the worm that dieth not. In
habits formed never to be broken; in words spoken, incapable of recall;
in deeds committed, never to be forgotten; in a life wasted and cast away
that can never be made to bloom again, man prepares for himself his own
deserved and inevitable chastisement. “Son, remember!”—to the soul
who has spent its all in riotous living, there can be no more awful
condemnation.
HENRY WATTERSON.
“ - .”
The South never knew what independence meant until she was
taught by subjection to subdue herself. She lived from hand to mouth.
We had our debts and our niggers. Under the old system we paid our
debts and walloped our niggers. Under the new we pay our niggers and
wallop our debts. We have no longer any slaves, but we have no longer
any debts, and can exclaim with the old darkey at the camp-meeting,
who, whenever he got happy, went about shouting, “Bless the Lord! I’m
gettin’ fatter an’ fatter!”
The truth is, that behind the great ruffle the South wore to its shirt,
there lay concealed a superb manhood. That this manhood was perverted,
there is no doubt. That it wasted its energies upon trifles, is beyond
dispute. That it took a pride in cultivating what it called “the vices of a
gentleman,” I am afraid must be admitted. But, at heart, it was sound;
from that heart flowed honest Anglo-Saxon blood; and, when it had to
lay aside its “store-clothes” and put on its homespun, it was equal to the
emergency. And the women of the South took their place by the side of
the men of the South, and, with spinning-wheel and ploughshare,
together they made a stand against the wolf at the door. That was fifteen
years ago, and to-day there is not a reward offered in a single Southern
State for wolf-skins. The fact is, the very wolves have got ashamed of
themselves and gone to work.
We need the money. You can make a profit off the development.
When I say that we need money, I do not mean the sort of money once
demanded by an old Georgia farmer, who, in the early days, came up to
Milledgeville to see General Robert Toombs, at the time a director of the
State Bank. “Robert,” says he, “the folks down our way air in need of
more money.” The profane Robert replied: “Well, how in ―― are they
going to get it?” “Why,” says the farmer, “can’t you stomp it?” “Suppose
we do stomp it, how are we going to redeem it?” “Exactly, Robert,
exactly. That was just what I was coming to. You see the folks down our
way air agin redemption.” We want good money, honest money, hard
money, money that will redeem itself.
We have given hostages to fortune and our works are before you. I
know that the capital is proverbially timid. But what are you afraid of? Is
it our cotton that alarms you, or our corn, or our sugar? Perhaps it is our
coal and iron. Without you, in truth, many of these products must make
slow progress, whilst others will continue to lie hid in the bowels of the
earth. With you the South will bloom as a garden and sparkle as a gold-
mine; for, whether you tickle her fertile plains with a straw or apply a
more violent titillation to her fat mountain-sides, she is ready to laugh a
harvest of untold riches.
MURAT HALSTEAD.
.
The machines upon which we impress the sheets we produce for the
market—and we all know how costly they are in their infinite variety of
improvements, for the earnings of the editor are swept away by the
incessant, insatiable requirements of the pressmaker—this facile
mechanism is not more changeable than the press itself, in its larger
sense—and the one thing needful, first and last, is man. With all the
changes, the intelligence of the printer and the personal force of the
editor are indispensable.
WHITELAW REID.
“ .”
“PICTURES OF A LOUISIANA
PLANTATION.” ¹
( “ .”)
I rode out first, that perfect day, among the gang of a hundred and
fifty negroes, who, on these plantations, were for the year to compromise
between their respect and their newborn spirit of independence by calling
me Mistah instead of Massa, there were no forebodings. Two “plough-
gangs” and two “hoe-gangs” were slowly measuring their length along
the two-mile front. Among each rode its own negro driver, sometimes
lounging in his saddle with one leg lodged on the pommel, sometimes
shouting sharp, abrupt orders to the delinquents. In each plough-gang
were fifteen scrawny mules, with corn-husk collars, gunny-bags, and
bedcord plough-lines. The Calhoun ploughs (the favorite implement
through all that region, then, and doubtless still, retaining the name given
it long before war was dreamed of) were rather lazily managed by the
picked hands of the plantation. Among them were several women, who
proved among the best laborers of the gang. A quarter of a mile ahead a
picturesque sight presented itself. A great crowd of women and children,
with a few aged or weakly men among them, were scattered along the
old cotton-rows, chopping down weeds, gathering together the trash that
covered the land, and firing little heaps of it, while through the clouds of
smoke came an incessant chatter of the girls, and an occasional snatch of
a camp-meeting hymn from the elders. “Gib me some backey, please,”
was the first salutation I received. They were dressed in a stout blue
cottonade, the skirts drawn up to the knees, and reefed in a loose bunch
at the waists; brogans of incredible sizes covered their feet, and there
was a little waste of money on the useless decency of stockings, but gay
bandannas were wound in profuse splendor around their heads.
The moment the sun disappeared every hoe was shouldered. Some
took up army-blouses or stout men’s overcoats, and drew them on; others
gathered fragments of bark to kindle their evening fires, and balanced
them nicely on their heads. In a moment the whole noisy crowd was
filing across the plantation towards the quarters, joining the plough-gang,
pleading for rides on the mules, or flirting with the drivers, and looking
as much like a troop flocking to a circus or rustic fair as a party of weary
farm-laborers. At the house the drivers soon reported their grievances.
“Dem women done been squabblin ’mong dei’ selves dis a’ternoon, so
I’s hardly git any wuck at all out of ’em.” “Fanny and Milly done got
sick to-day; an’ Sally heerd dat her husban’s mustered out ob de army,
an’ she gone up to Natchez to fine him.” “Dem sucklers ain’t jus’ wuf
nuffin at all. ’Bout eight o’clock dey goes off to de quarters of deir
babies, an’ I don’ nebber see nuffin mo’ ob ’em till ’bout elebben. Den
de same way in de a’ternoon, till I’s sick ob de hull lot. De moody
(Bermuda grass) mighty tough ’long heah, an’ I could’nt make dem
women put in deir hoes to suit me nohow.” Presently men and women
trooped up for the ticket representing their day’s work. The women were
soon busy preparing their supper of mess pork and early vegetables;
while the plough-gang gathered about the overseer. “He’d done promise
dem a drink o’ wiskey, if dey’d finish dat cut, and dey’d done it.” The
whiskey was soon forthcoming, well watered with a trifle of Cayenne
pepper to conceal the lack of spirit, and a little tobacco soaked in it to
preserve the color. The most drank it down at a gulp from the glass into
which, for one after another, the overseer poured “de lowance.” A few, as
their turns came, passed up tin cups and went off with their treasure,
chuckling about “de splendid toddy we’s hab to-night.” Then came a
little trade with the overseer at “the store.” Some wanted a pound or two
of sugar; others, a paper of needles or a bar of soap; many of the young
men, “two bits’ wuf” of candy or a brass ring. In an hour trade was over,
and the quarters were as silent as a churchyard. But, next morning, at
four o’clock, I was aroused by the shrill “driber’s horn.” Two hours later
it was blown again, and, looking from my window just as the first rays of
light came level across the field, I saw the women filing out, with their
hoes, and the ploughmen leisurely sauntering down to the stables, each
with corn-husk collar and bedcord plough-lines in his hands. The passion
for whiskey among the negroes seemed universal. I never saw a man,
woman or child, reckless young scapegrace or sanctimonious old
preacher, among them, who would refuse it; and the most had no
hesitancy in begging it whenever they could. Many of them spent half
their earnings buying whiskey. That sold on any of the plantations I ever
visited or heard of was always watered down at least one-fourth. Perhaps
it was owing to this fact, though it seemed rather an evidence of
unexpected powers of self-restraint, that so few were to be seen
intoxicated.
“Yes.”
“Boss, I’s drunk; boss, I’s ’shamed o’ myself! but I’s drunk! I ’sarve
good w’ipping. Boss,—boss, s-s-slap me in de face, boss.”
His aims were not the aims of the ordinary journalist. He saw
with unusual clearness the possibilities of his profession, and he
saw also that he needed a wider educational basis. His interest in
social and political topics was the interest of a man of
philosophic mind, eager to learn the principles and not simply to
record the varying aspects from day to day. In order the better to
secure the equipment of which he felt the need, he entered the
Johns Hopkins University and took a post-graduate course. It
was during his residence in Baltimore that he met Professor
Bryce, who recognized his rare ability and intelligence, and who
used his unusually large knowledge of social and political
conditions in the country. While carrying on his special studies
at the Johns Hopkins University, Dr. Shaw joined the editorial
staff of the Minneapolis daily “Tribune.” After receiving the
degree of Ph.D. in 1884, he removed permanently to
Minneapolis, and took his place at the head of the staff of the
“Tribune.” His work almost at once attracted attention. Its
breadth, its thoroughness, its candor, and its ability were of a
kind which made themselves recognized on the instant. Four
years later Dr. Shaw spent a year and a half studying social and
political conditions in Europe, traveling extensively and
devoting much time to the examination of the condition of
municipalities. It was this study which has borne fruit in the two
volumes on Municipal Government which have come from the
press of the Century Company, and which have given Dr. Shaw
the first rank as an authority on these matters. When the “Review
of Reviews” was established in this country in 1891, Dr. Shaw
became its editor, and his success in the management of this very
important periodical has justified the earlier expectations
entertained by his friends, for he has given the “Review of
Reviews” a commanding position. He is one of the very few
journalists in this country who treat their work from the
professional standpoint, who are thoroughly equipped for it, and
who regard themselves as standing in a responsible relation to a
great and intelligent public. Dr. Shaw’s presentation of news is
pre-eminently full, candid, and unpartisan; his discussion of
principles is broad-minded, rational, and persuasive. He is
entirely free from the short-sighted partisanship of the great
majority of newspaper editors, and he appreciates to the full the
power of intelligent, judicial statement. His opinions, for this
reason, carry great weight, and it is not too much to say that he
has not his superior in the field of American journalism.
JULIAN HAWTHORNE.
.
The Wayside, however, was not white, it was painted a dingy buff
color. The larches and Norway pines, several hundred of which had been
sent out from England, were planted along the paths, and were for the
most part doing well. The well-remembered hillside, with its rude
terraces, shadowed by apple-trees, and its summit green with pines, rose
behind the house; and in front, on the other side of the highway,
extended a broad meadow of seven acres, bounded by a brook, above
which hung drooping willows. It was, upon the whole, as pleasant a
place as any in the village, and much might be done to enhance its
beauty. It had been occupied, during our absence, by a brother of Mrs.
Hawthorne; and the house itself was in excellent order, and looked just
the same as in our last memory of it. A good many alterations have been
made since then; another story was added to the western wing, the tower
was built up behind, and two other rooms were put on in the rear. These
changes, together with some modifications about the place, such as
opening up of paths, the cutting down of some trees, and the planting of
others, were among the last things that engaged Hawthorne’s attention in
this life.
Low, flat ledges of rock extended into the sea. A group of creatures
in loin-cloths and red turbans were squatting or moving about between
two or three heaps of burning timber. These were made of stout logs
piled across one another to a height of about four feet. Half-way in the
pile was placed a human body; it was not entirely covered by the wood,
but a leg projected here, an arm there. The flames blazed up fiercely,
their flickering red tongues contrasting with the pale blue of the calm sea
beyond. The smoke arose thick and unctuous, and, fortunately, was
carried seaward. One of the pyres had burnt down to white ashes, and
nothing recognizable as human remained. The people whose bodies were
here burned had died in the segregation huts the night before.
RICHARD HARDING
DAVIS.
ICHARD HARDING DAVIS has shown a
marvelous skill in seeing the world, in travel,
and of describing it as he sees it. He is not a
profound student of the mystery of the human
mind, but he possesses in high degree and in
rare quality an instinct of selection, a clear sense of an artistic
situation in a group of more or less ordinary circumstances and a
gift in interesting description. He is, in short, a very clever
newspaper reporter who has transferred his field of service from
the region of the actual to the realm of the imaginary. His
reputation, however, is about equally divided between his works
of description and travel and his stories of a more imaginative
order, though in both classes of writings, he is above everything
else a describer of what he has seen.