Osiecki IB Econ Chapter 2 Test

Which of the following is an example of a price ceiling? A)minimum wage laws for unskilled workers B)price supports for agricultural products C)limits on interest rates charged by credit card companies D)subsides for apartment rent in major cities

C

Price floors and ceiling prices both A) interfere with the rationing function of prices B) cause the supply and demand curves to shirt until equilibrium is established C) cause shortages D)cause surpluses

A

Which of the following statements is true about price ceilings? A) Price ceilings cause goods to be rationed by some other means than legally determined market prices B)ration coupons are the only way to ration goods when price ceilings are in place C)price ceilings create surpluses for goods but shortages for services D)all of the other statements are correct

A

An effective price ceiling will A)induce new firms to enter the industry B) result in a product shortage C) clear the market D) result in a product surplus

B

Consumer surplus A) rises as equilibrium price rises B) is the difference between the maximum prices conumsers are willing to pay for a product and the lower equilibrium price C)the difference between the minimum prices producers are willing to accept for a product at the higher eq. price

B

An effective price floor on wheat will: A)clear the market for wheat B)result in a shortage of wheat C)force otherwise profitable farmers out of business D)result in a surplus of wheat

D

Producer surplus is the difference between A)The max prices consumers will pay for a product and the lower equilibrium price B)the minimum prices producers will accept for a product at the higher equilibrium price C)the quantity supplied and qd at an equilibrium price D) the max prices consumers are willing to pay for a prodct and the min prices producers will accept

B

A price ceiling means that A)government is imposing a legal price that is typically above the equillibrium price B)government wants to stop a deflationary spiral C)there is currently a surplus of the relevant product D)government is imposing a legal price that is typically below the equilibrium price

D

An effective price floor will A) force some firms in this industry to go out of business B)result in a product shortage C)clear the market D)result in a product surplus

D

If an effective ceiling price is placed on hamburgers then: A) the quantity demanded will exceed the quantity supplied B) the price charged will be below the market-clearing price C)a black market for hamburges may evolve D)all of these are likely outcomes

D