30: Government Intervention in the Functioning of Markets
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A shortage is always caused by a price ceiling
False
The government has used rent controls in the past to keep rents below equilibrium. This is an example of a price ceiling.
True
The minimum wage is an example of
a price floor
A price ceiling can create
a shortage
A price floor can create
a surplus
When the demand for a good or service increases,
equilibrium quantity increases
When the supply of a good or service increases,
market supply increases
A ______ is created when the quantity demanded is greater than the quantity supplied
shortage
A price ceiling is set by the government when prices are thought to be
too high
A price floor is set by the government when prices are thought to be
too low