Price Controls

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

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

If the government set the price at $700, would that be a price ceiling or floor?

• Price Ceiling
• Price Floor 
• Neither

If an effective rent ceiling is eliminated, which of the following is most likely to occur in the rental housing market? 

• An increase in the demand for housing, resulting in a decrease in the quantity of housing supplied 
• An increase in the demand for housing, resulting in an increase in the quantity of housing demanded 
• An increase in rents, resulting in an increase in the quantity of housing supplied 
• A decrease in rents, resulting in an increase in the quantity of housing supplied 

When a price ceiling is imposed in a market:

• A surplus results

• Sellers of the product are made better off

• A shortage results

• Quantity supplied is greater than the quantity demanded

At the price, neither a surplus or a shortage exists

• equilibrium

• consumer surplus

• producer's surplus

• dead weight

A _______________ is a maximum price sellers are allowed to charge for a good. It's an upper limit for the price.

• equilibrium

• shortage

• surplus

• price ceiling

This is the minimum price buyers are required to pay for a good. It's a lower limit for the price.

• equilibrium

• shortage

• price floor

• price ceiling

A price ceiling will result in a

• shortage

• surplus

• equilibrium price

• equilibrium quantity

A price floor will result in a

• shortage

• surplus

• equilibrium price

• equilibrium quantity

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