EPF 3.4 Review

What is an example of a surplus in the housing market?

• Too many homes, not enough buyers

• Too few homes, too many buyers

• Equal number of homes and buyers

• Increasing home prices due to demand

What can overproduction of crops lead to?

• Higher farm prices

• Lower farm prices

• Stable farm prices

• Increased demand for crops

What occurs when the quantity demanded is greater than the quantity supplied?

• Surplus

• Shortage

• Equilibrium

• Inflation

When there is a shortage, what happens to the price in relation to equilibrium?

• Price is above equilibrium

• Price is below equilibrium

• Price remains at equilibrium

• Price is unaffected

What market pressure occurs during a shortage?

• Market pressure pushes price down

• Market pressure keeps price stable

• Market pressure pushes price up

• Market pressure has no effect on price

What are price controls?

• Government-imposed limits on prices

• Market-determined price levels

• Consumer-set price preferences

• Manufacturer-determined price limits

When is a price ceiling considered effective?

• When set above the equilibrium price

• When set below the equilibrium price

• When set at the equilibrium price

• When set by producers

What is a negative impact of a price ceiling on consumers?

• It increases the availability of products

• It reduces the need for government intervention

• It hurts consumers who cannot find the product

• It increases consumer choice

What happens to producers when price ceilings are in place?

• They receive higher prices and sell more units

• They receive lower prices and sell fewer units

• They maintain the same level of sales

• They experience increased market efficiency

What is the overall effect on market efficiency when price ceilings are applied?

• Market efficiency increases

• Market efficiency remains unchanged

• Market efficiency decreases

• Market efficiency becomes optimal