Price Controls and Efficiency

Question 1

A price ceiling sets a minimum price for goods.

Accepted Answer

False

Question 2

When a price ceiling is imposed in a market, _________.

Accepted Answer

a persistent shortage results

Question 3

A price floor places a(n) _______ limit on the price particular things can be ______.

Accepted Answer

lower; traded

Question 4

Price ceilings were established for most goods during WWII because of _______.

Accepted Answer

chronic excess demand

Question 5

All of the following are associated with price ceilings EXCEPT

Accepted Answer

chronic excess supply

Question 6

A price floor will create chronic excess supply if it is set above the equilibrium price.

Accepted Answer

True

Question 7

If there is excess demand for a product, what price control is being used?

Accepted Answer

price ceiling

Question 8

You know we love you, sir.

Accepted Answer

Okay, Bye

Question 9

If a price floor is set below the equilibrium price, it has no effect on the market.

Accepted Answer

True

Question 10

Chromic excess demand cannot exist if price is set below the market equilibrium.

Accepted Answer

False

Question 11

Which of the following is a problem not associated with price floors?

Accepted Answer

the emergence of black markets

Question 12

A price floor keeps the price of a good from falling too low.

Accepted Answer

True

Question 13

A price ceiling creates _______ when it is set ______ the equilibrium price.

Accepted Answer

excess demand; below

Question 14

If there is excess supply for a product, what price control is being used?

Accepted Answer

price floor

Question 15

A price floor creates _______ when it is set ______ the equilibrium price.

Accepted Answer

excess supply; above

Question 16

A price ceiling places a(n) _______ limit on the price particular things can be ______.

Accepted Answer

upper; traded

Question 17

Is Muzquiz an old fart?

Accepted Answer

Yes, Yes, Yes, Yes

Questions 17