Price Floor and Price Ceilings

What does this graph show?

• Shortage
• Surplus
• Supply Table
• Equilibrium

Which of the following would not cause as shift in demand?

• Decrease in income
• Lower supply
• Change in tastes
• Increase in price

If a price floor was set at 320, what quantity would be purchased?

• 20
• 40
• 60
• 80

An Increase in Supply or a shift of the supply curve to the  right occurs when:

• A rise in input costs happens
• If Government pays subsidies for a good.
• If producers expect the price to fall in the future.
• If government regulates a good.

An effective price floor must be set above equilibrium, resulting in:

• a shortage
• a surplus
• limited choices
• None of the above

Which of the following would cause a change in supply?

• A change in market price
• A change in technology available
• A change in the number of sellers
• All of the above

If the price of butter increases, then we would expect that the demand for margarine would fall.

• True
• False

Price ceilings lead to ___________ and price floors lead to ___________.

• surplus;shortage
• shortage;surplus

What is the supply with a price floor of $60?

• 50
• 100
• 150
• 200

What is the result of the government implementing a price floor of $60

• There would be a shortage of 100 since it is cheaper for consumers 
• There would be a surplus of 100 because it is more expensive for consumers 
• There would be a shortage of 100 because it is assisting the suppliers
• There would be a surplus of 100 because it is beneficial to consumers