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Econ Quiz

In: Business and Management

Submitted By AbdulaziZ91
Words 406
Pages 2
1. Price controls are usually enacted
a. as a means of raising revenue for public purposes.
b. when policymakers believe that the market price of a good or service is unfair to buyers or sellers.
c. when policymakers detect inefficiencies in a market. d. All of the above are correct.
ANS: B 2. A price ceiling
a. is a legal maximum on the price at which a good can be sold.
b. is often imposed in markets in which “cutthroat competition” would prevail without a price ceiling.
c. is often imposed when sellers of a good are successful in their attempts to convince the government that the market outcome is unfair without a price ceiling.
d. All of the above are correct.
ANS: A 3. A price floor is binding if it
a. is set lower than the equilibrium market price.
b. results in an observed price that is the same as the equilibrium price.
c. leads to a surplus. d. is strictly enforced by the government.
ANS: C 4. If a binding price ceiling were imposed in the computer market,
a. the demand for computers would increase. b. the supply of computers would decrease.
c. a shortage of computers would develop. d. All of the above are correct.
ANS: C 5. Advocates of the minimum wage
a. deny that the minimum wage produces any adverse effects.
b. emphasize the benefits to teenagers of increases in the minimum wage.
c. emphasize the low annual incomes of those who work for the minimum wage.
d. All of the above are correct.
ANS: C 6. The minimum wage is an example of
a. a price ceiling. b. a price floor.
c. a wage subsidy. d. a price control that is not binding.
ANS: B

7. Refer to Figure 6-8. The effective price that buyers pay after the tax is imposed is
a. $8. b. $6. c. $5. d. $3.
ANS: A

8. Refer to Figure 6-8. The price that sellers receive after the tax is imposed is
a. $8. b. $6. c. $5. d. $3.
ANS: C

9.

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