- A price ceiling is a:
A. legally established minimum price that can be charged for a good.
B. legally established maximum price that can be charged for a good.
C. minimum price that is in fact charged in a competitive market.
D. maximum price that is in fact charged in a competitive market.
E. maximum price that the good has ever sold for.
- A price floor is a:
A. legally established minimum price that can be charged for a good.
B. legally established maximum price that can be charged for a good.
C. minimum price that is in fact charged in a competitive market.
D. maximum price that is in fact charged in a competitive market.
E. maximum price that the good has ever sold for.
- A price ceiling creates _ when it is set _ the equilibrium price.
A. excess demand — below
B. excess demand — above
C. excess supply — below
D. excess supply — above
- A price floor creates _ when it is set __ the equilibrium price.
A. excess demand — below
B. excess demand — above
C. excess supply — below
D. excess supply — above
- A price ceiling usually results in _ consumer surplus, _ producer surplus, and
A. higher – lower – some deadweight loss
B. higher – lower – higher tax revenues
C. lower – higher – some deadweight loss
D. lower – higher – higher tax revenues
E. lower – lower – some deadweight loss
- A price floor usually results in _ consumer surplus, producer surplus, and
A. higher – lower – some deadweight loss
B. higher – lower – higher tax revenues
C. lower – higher – some deadweight loss
D. lower – higher – higher tax revenues
E. lower – lower – some deadweight loss
- The wholesale market equilibrium price is 6 cents a pound for raw sugar, and the market quantity sold is 30 million pounds. Which of the following policies would create an excess supply of sugar?
A. A price ceiling of 10 cents a pound
B. A price floor of 10 cents a pound
C. A price ceiling of 3 cents a pound
D. A price flor of 3 cents a pound.
- The wholesale market equilibrium price is 6 cents a pound for raw sugar, and the market quantity sold is 30 million pounds. Which of the following policies would create an excess demand for sugar?
A. A price ceiling of 10 cents a pound
B. A price floor of 10 cents a pound
C. A price ceiling of 3 cents a pound
D. A price flor of 3 cents a pound.
- If there is excess demand for a product because of price controls, we can be sure that the price control being used is a:
A. price floor
B. price ceiling
C. excise tax on producers
D. sales tax on consumers
True or False Price ceiling is a minimum price that sellers may charge for a good, usually set by government.
True or False Price floor is a maximum price below which exchange is not permitted.