All of the following are inefficiencies caused by a price floor except

buyers who want to purchase a higher price are not allowed

In a market economy, equilibrium is determined...

through interaction of buyers and sellers

This occurs when the Q-supplied exceeds the Q-demanded.

When regular market forces are at work, prices below equilibrium will be...

bid up due to competition between buyers

This occurs when the Q-demanded exceeds the Q-supplied

When supply decreases, what will happen to the equilibrium price and quantity?

Price increases; Quantity decreases

When demand decreases, what happen to the equilibrium price and quantity?

Price decreases; Quantity decreases

What is a Binding Price Floor

A price control placed above the equilibrium price.

What are inefficient Markets

Price controls usually result in this

When demand increases, what will happen to the equilibrium price and quantity?

Price increases; Quantity increases

When supply increases, what will happen to the equilibrium price and quantity?

Price decreases; Quantity increases

A market is said to be in equilibrium when...

the quantity demanded equals the quantity supplied

studbud

Equilibrium and Price Ceilings and Floors Review

15 termsStudBud Administration446 plays

A review over Equilibrium to prepare for quiz and to prepare for the Price Ceiling and Price Floors Quiz

Flashcards15 cardsFPractice quizPHost liveL

Questions 15

Answers

1
All of the following are inefficiencies caused by a price floor except
buyers who want to purchase a higher price are not allowed
surpluses must be destroyed or thrown away
a black market emerges
sellers who want to sell at a lower price can't
2
In a market economy, equilibrium is determined...
through interaction of buyers and sellers
by the buyers
by the sellers
when the government sets a stable price
3
Define Surplus
This occurs when the Q-demanded exceeds the Q-supplied
This occurs when the Q-supplied exceeds the Q-demanded.
Price controls usually result in this
A price control placed above the equilibrium price.
4
A price ceiling will usually result in a
quota rent
surplus
shortage
wedge
5
When regular market forces are at work, prices below equilibrium will be...
bid down due to competition between sellers
bid down due to competition between buyers
bid up due to competition between buyers
bid up due to competition between sellers
6
Define Shortage
This occurs when the Q-supplied exceeds the Q-demanded.
This occurs when the Q-demanded exceeds the Q-supplied
Price controls usually result in this
A price control placed above the equilibrium price.
7
When supply decreases, what will happen to the equilibrium price and quantity?
Price decreases; Quantity increases
Price decreases; Quantity decreases
Price increases; Quantity increases
Price increases; Quantity decreases
8
When demand decreases, what happen to the equilibrium price and quantity?
Price increases; Quantity increases
Price decreases; Quantity decreases
Price increases; Quantity decreases
Price decreases; Quantity increases
9
What is a Binding Price Floor
A price control placed above the equilibrium price.
This occurs when the Q-demanded exceeds the Q-supplied
This occurs when the Q-supplied exceeds the Q-demanded.
Price controls usually result in this
10
What are inefficient Markets
Price controls usually result in this
A price control placed above the equilibrium price.
This occurs when the Q-demanded exceeds the Q-supplied
This occurs when the Q-supplied exceeds the Q-demanded.
11
All of the following are inefficiencies caused by a price ceiling EXCEPT
damage done to the environment
a black market emerges
supplier provide low-quality products
people spend extra time and money to sell
12
When demand increases, what will happen to the equilibrium price and quantity?
Price decreases; Quantity increases
Price decreases; Quantity decreases
Price increases; Quantity increases
Price increases; Quantity decreases
13
A price floor will usually result in a
surplus
shortage
quota rent
wedge
14
When supply increases, what will happen to the equilibrium price and quantity?
Price increases; Quantity decreases
Price increases; Quantity increases
Prices decreases; Quantity decreases
Price decreases; Quantity increases
15
A market is said to be in equilibrium when...
both demand and supply have stopped changing
no new firms are entering the industry
there are an equal number of buyers and sellers
the quantity demanded equals the quantity supplied

Equilibrium and Price Ceilings and Floors Review Flashcards | StudBud