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Price Controls and Efficiency Flashcards | StudBud
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Price Controls and Efficiency
Price Controls and Efficiency
15 terms
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StudBud Administration
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184 plays
Andrea Lozano
Flashcards
15 cards
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Practice quiz
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Questions
15
Answers
1
If a price floor is set below the equilibrium price, it has no effect on the market.
False
True
2
A price ceiling creates _______ when it is set ______ the equilibrium price.
excess supply; above
excess demand; below
excess demand; above
excess supply; below
3
When a price ceiling is imposed in a market, _________.
no one is made better off
a persistent surplus results
sellers of the product are made better off
a persistent shortage results
4
A price ceiling places a(n) _______ limit on the price particular things can be ______.
upper; produced
upper; traded
lower; produced
lower; traded
5
Chromic excess demand cannot exist if price is set below the market equilibrium.
True
False
6
If there is excess demand for a product, what price control is being used?
excise tax on producers
price floor
price ceiling
sales tax on consumers
7
Which of the following is a problem not associated with price floors?
large subsidies paid by the government
chronic excess supply
higher prices for consumers
the emergence of underground markets
8
Price ceilings were established for most goods during WWII because of _______.
food shortages
Chronic shortages
chronic surpluses
chronic excess supply
9
If there is excess supply for a product, what price control is being used?
price ceiling
sales tax on consumers
price floor
excise tax on producers
10
A price floor keeps the price of a good from falling too low.
True
False
11
All of the following are associated with price ceilings EXCEPT
an eventual decline in number of suppliers
the need to ration coupons to purchase a good
chronic excess supply
chronic excess demand
12
A price floor creates _______ when it is set ______ the equilibrium price.
excess demand; above
excess supply; above
excess demand; below
excess supply; below
13
A price floor places a(n) _______ limit on the price particular things can be ______.
lower; traded
lower; produced
upper; produced
upper; traded
14
A price floor will create chronic excess supply if it is set above the equilibrium price.
False
True
15
A price ceiling sets a minimum price for goods.
False
True
