Honors Economics - Practice Midterm

Front

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

Back

a surplus

Front

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

Back

Price Floor

Front

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

Back

An increase in rents, resulting in an increase in the quantity of housing supplied 

Front

When a price ceiling is imposed in a market, what happens?

Back

A shortage results

Front

At the price, neither a surplus nor a shortage exists.

Back

equilibrium

Front

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

Back

price ceiling

Front

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

Back

price floor

Front

A price ceiling will result in a

Back

shortage

Front

A price floor will result in a: shortage, surplus, equilibrium price, equilibrium quantity

Back

surplus

Front

What does this curve represent? Options: demand, supply, equilibrium, shortage

Back

supply