the maximum legal price that can be charged for a product

Increased production will result in

an increase in supply and decrease in prices

Why have free market economies like the US periodically used a rationing system?

To ensure proper allocation of resources during war time

Why do political leaders continue programs like rent control and farm subsidies that are not economically sound?

They achieve social goals important to the government

What is the impact of rent control on the supply of apartments

Lower supply because landlords have no incentive to add apartments

Which of the following best describes rent control?

A hard cap on the maximum rent a landlord can charge

Which of the following best describes rent stabilization?

Allows a landlord to raise rent by a limited percentage annually

Which of the following is NOT a benefit of rent stabilization?

Encourages tenants to keep much larger apartments than they need

A shortage is described as

the quantity supplied is less than the quantity demanded

What keeps prices from falling too far in a competitive market?

competition between buyers for the product

Market equilibrium occurs when

the quantity demanded is equal to the quantity supplied

How do prices help the economy run?

They efficiently allocate resources

A shortage in a market will cause

an increase in prices and production

studbud

Prices and Decision Making

30 termsStudBud Administration163 plays

Imported from external platform

Flashcards30 cardsFPractice quizPHost liveL

Questions 30

Answers

1
Why do governments put price controls in place?
To make markets more efficient
To achieve a social goal
To cause unintended consequences
2
Rent control makes housing more available and costs more affordable
True
False
3
Prices allocate resources within markets and also across markets
False
True
4
This is the result when the quantity supplied is greater than the quantity demanded at a given price
equilibrium
price floor
shortage
surplus
5
A Price Ceiling is
the maximum legal price that can be charged for a product
the next highest price above equilibrium price
the highest price the market is willing to pay for a product
the highest price that has a quantity demanded
6
An advantage of the rationing system is that it requires a bureaucracy to manage it
True
False
7
Increased production will result in
an increase in supply and decrease in prices
an increase in supply and prices
an increase in supply and price equilibrium
8
When there is a shortage in a market there is
a rise in prices
a decline in prices
price equilibrium
9
Minimum wage is a form of
Price floor
Price support
Price ceiling
Price subsidy
10
Why have free market economies like the US periodically used a rationing system?
To ensure proper allocation of resources during war time
To prevent firms from taking advantage of natural disasters
To create a fair system of distributing necessities
To allocate scarce resources more efficiently than the market
11
Why do political leaders continue programs like rent control and farm subsidies that are not economically sound?
The cost is not all that great
The benefits outweigh the costs
They achieve social goals important to the government
12
If the number of buyers in a market increases and supply remains the same we can expect
Prices to rise
Prices to remain the same
Prices to fall
13
What is the impact of rent control on the supply of apartments
Raises supply because more people apartments
Lower supply because landlords have no incentive to add apartments
It does not impact the supply of apartments in the market
14
Which of the following best describes rent control?
The income adjusted amount a renter can afford to pay for an apartment
A hard cap on the maximum rent a landlord can charge
A lower limit of how much a landlord can charge
Allows a landlord to raise rent by a limited percentage annually
15
Which of the following best describes rent stabilization?
The income adjusted amount a renter can afford to pay for an apartment
A hard cap on the maximum rent a landlord can charge
Allows a landlord to raise rent by a limited percentage annually
A lower limit of how much a landlord can charge
16
Command economies like Cuba and Venezuela use this system to allocate resources
rationing
socialism
logistics
free market
17
In a competitive market economy, prices
are neutral and favor both
favor the consumer
are neutral and favor neither
favor the producer
18
Administrative costs and fairness are two major problems with
Free Markets
Rationing
economic models
The Price system
19
Which of the following is NOT a benefit of rent stabilization?
Allows landlords to earn enough to profit and maintain properties
Decreases turnover of rental units
Protects tenants from sudden, large rent increases
Encourages tenants to keep much larger apartments than they need
20
The monetary value of a product as established by supply and demand
price
cost
profit
margin
21
Rent Control is a form of
Price Floor
Price Ceiling
Rationing
Equilibrium Price
22
A shortage is described as
the quantity supplied is less than the quantity demanded
the quantity supplied is equal to the quantity demanded
the quantity supplied is more than the quantity demanded
23
What keeps prices from falling too far in a competitive market?
competition between buyers for the product
competition between sellers for customers
price floors
price subsidies
24
Market equilibrium occurs when
the quantity demanded is equal to the quantity supplied
The prices in the markets are stable
Prices do not respond to a change in quantity demanded
Prices do not respond to a change in quantity supplied
25
How do prices help the economy run?
They efficiently allocate resources
They signal buyers when to buy
They maintain competition between sellers
They establish equilibrium between supply and demand.
26
What signals do low prices send to the buyers and producers in a market?
buy less and produce less
buy less and produce more
buy more and produce less
buy more and produce more
27
A shortage in a market will cause
a decrease in prices and increased production
an increase in prices and decreased production
an increase in prices and production
a decrease in prices and production
28
Prices are the most efficient way of allocating scarce resources in a market.
True
False
29
High prices in a market cause a surplus which should
cause price equilibrium
cause prices to go higher
cause prices to go lower
30
What signals do high prices send to the buyers and producers in a market?
buy less and produce more
buy more and produce more
buy less and produce less
by more and produce less

Prices and Decision Making Flashcards | StudBud