• California State University, Long Beach

• ECON 101

ECON101 Exam 2 key Test Form: A Note: Total points is 100. I. Multiple Choices (2 pts each, 70 pts total) 1. Refer to the accompanying figure. At what price would there be the least pressure to form a black market? a. $5 b. $8 c. $13 d. $15 e. $20 ANS: B 2. What is the long-run consequence of a price ceiling law? a. A surplus will continue to exist and will grow larger over time. b. A surplus will continue to exist and will grow smaller over time. c. A shortage will continue to exist and will grow larger over time. d. A shortage will continue to exist and will grow smaller over time. e. The amount of the surplus will not change. ANS: C 3. Refer to the accompanying figure, which shows both short-run and long-run demand and supply curves. If there is a $4 binding price ceiling imposed on a pharmaceutical drug, what will be the amount of the disequilibrium in the short run?