1. When a price ceiling is imposed in a market, a. a persistent shortage results b. a persistent surplus results c. sellers of the product are made better off d. no one is made better off e. quantity supplied is greater than the quantity demanded
1. When a
a. a persistent shortage results
b. a persistent surplus results
c. sellers of the product are made better off
d. no one is made better off
e. quantity supplied is greater than the quantity demanded
2. All of the following are problems associated with price ceilings except
a. chronic excess demand
b. an eventual decline in the number of suppliers
c. the need to use ration coupons to purchase the good
d. chronic
e. landlords failing to maintain rent-controlled properties adequately
3. When a price floor is imposed, it has an impact on a market if it is set
a. below the
b. at the equilibrium price
c. above the equilibrium price because quantity demanded exceeds quantity supplied
d. above the equilibrium price because quantity supplied exceeds quantity demanded
e. below the equilibrium price because quantity demanded exceeds quantity supplied
4. One lesson to be drawn from our discussion of price ceilings and
a. government intervention in the economy should be routine and extensive
b. the government can easily solve most economic problems
c. price ceilings work better than price floors
d. in most cases, prices should be set by the interaction of
e. price controls work best if left in place over long periods
5. Which of the following is not a problem associated with price floors?
a. chronic excess supply
b. the transfer of income nonfarm taxpayers to farmers
c. large subsidies paid by the government
d. a higher price for consumers
e. the emergence of black markets for agricultural commodities
6. In order for a price floor to be effective/binding, it must be set _____________ the equilibrium price, while a price ceiling must be set _____________ the equilibrium price in order to be effective/binding.
a. above; below
b. above; above
c. below; above
d. below; below
e. at; at
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