Question 1 Curves D2 and S2 represent the market for beer if it is legal. Prohib

Question

Question 1

Curves D2 and S2 represent the market for beer if it is legal. Prohibition will cause equilibrium price and quantity to change to

Select one:

a. P1 and Q2.

b. P2 and Q1.

c. P3 and Q4.

d. P4 and Q3.

e. none of the above.

Question 2

Which of the following statements is correct?

Select one:

a. Criminal acts are illegal acts whether or not those acts are immoral

b. Some immoral acts are criminal acts and some are not

c. Some acts are criminal because they lead to consequences the criminal is unaware of

d. Some acts that might result in chaotic conditions are made criminal by legislative bodies

e. All of the choices

Question 3

Which of the following demographic groups historically has the highest incidence of poverty?

Select one:

a. Hispanic families in rural areas with children living at home

b. White, female headed families in urban areas with no children living at home

c. Black families, headed by a male income earner, with children living at home

d. Female headed black families with children living at home

e. White, married couples with no children living at home

Question 4

Private school cost per pupil is lower because of

Select one:

a. fund raising.

b. private contributions.

c. student fees.

d. volunteer labor.

e. all of the choices.

Question 5

Which of the following statements is false?

Select one:

a. The government in a private enterprise economy confines its production of goods and services to public goods

b. A major difference between private enterprise economic system and a socialistic economic system is that the government of the latter is responsible for the production of most private, as well as public and semi-private, goods

c. Governments of private enterprise systems leave the bulk of private goods to be produced by private businesses

d. Governments of private enterprise economies play a relatively important role in the provision of semi-private goods

e. None of the choices

Explanation / Answer

Question 1

Prohibition will lead to decrease in both demand for beer and supply of beer.

This will shift both demand curve and supply curve leftwards.

Demand curve will shift to the left from D2 to D1.

Supply curve will shift to the left from S2 to S1.

New demand curve (D1) and new supply curve (S1) are intersecting each other corresponding to the price, P2, and quantity, Q1.

So,

Prohibition will cause equilibrium price and quantity to change to P2 and Q1.

Hence, the correct answer is the option (b).

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