Econ- 4.4 Formative Assessment Option 2

Which of the graphs given will always result in a SHORTAGE?

A Price Ceiling is always set ​ (a)   equilibrium.

A Price Floor is always set ​ (b)   equilibrium.

The price control that will result in a surplus is a ​ (c)  

• below
• above
• price floor
• price ceiling
• at

Attached is a  Supply and Demand Schedule and a Supply and Demand Graph for Cheese (by the pound).  Use them to help you answer the following question:

a. What is the equilibrium price?

b. What is the quantity demanded at the equilibrium price?
c. What is the quantity supplied at the equilibrium price?

• a. $6

  b. 220 pounds of cheese

  c. 400 pounds of cheese

• a. $4.50

  b. 280 pounds of cheese

  c. 280 pounds of cheese

• a. $4.00

  b. 280 pounds of cheese

  c. 280 pounds of cheese

• a. $3.00

  b. 320 pounds of cheese

  c. 200 pounds of cheese

Attached is a Supply and Demand Schedule and a Supply and Demand Graph for Cheese (by the pound).  Use them to help you answer the following questions

 Everything else remaining constant, assume the government sets a Price Control for Cheese at $4.00.

a. What type of Price Control would this be?
b. At a price of $4.00, what is the quantity demanded?
c. At a price of $4.00, what is the quantity supplied?
d. Is there a surplus or shortage of cheese?  

e. What is the AMOUNT of the surplus or shortage?

• a. Price Ceiling

  b. 300 pounds of cheese

  c. 240 pounds of cheese

  d. shortage

  e. 60 pounds of cheese

• a. Price Floor

  b. 300 pounds of cheese

  c. 240 pounds of cheese

  d. surplus

  e. 40 pounds of cheese

• a. Price Ceiling

  b. 300 pounds of cheese

  c. 240 pounds of cheese

  d. shortage

  e. 40 pounds of cheese

• a. Price Floor

  b. 300 pounds of cheese

  c. 240 pounds of cheese

  d. shortage

  e. 60 pounds of cheese

Based on the Image 4.4A, if a state were to decide the price of cow milk was too low, at which of the follow should the price of cow milk be set?

• P1

• P2

• Q3

• Q1

1. In an attempt to get more consumers to ride bikes instead of driving automobiles, the State of Minnesota mandates that the prices of all bikes sold in the state must set at P3 in Image 4.4A.  

   2. a. What type of price control would this be?

2.  b. What type of inefficiency would be created is the price of bikes were set at Price P3?

3. c. Using Image 4.4A, what formula would best represent the AMOUNT of the inefficiency you identified in (b)?

• a. Price Ceiling

  b. Shortage

  c. Q3-Q1

• a. Price Floor

  b. Surplus

  c. Q3-Q2

• a. Price Ceiling

  b. Shortage

  c. Q3-Q2

• a. Price Floor

  b. Shortage

  c. Q3-Q1