Supply, demand and price

1. In the United States, prices are determined entirely by price.

• True
• False

2. The government sometimes sets prices to achieve social goals.  

• True
• False

3. Price floors and price ceilings prevent items from obtaining their equilibrium price.

• True
• False

4. The minimum wage is an example of a government price control.

• True
• False

5. An equilibrium price is the goal of a price floor or a price ceiling.

• True
• False

6. Which of these will create a market surplus?

• A. Price floor
• B. Price Ceiling

7.  Which of these will likely create a shortage?

• A. A market price
• B. A price ceiling

Which of these describes the effects of price floors on the U.S. sugar industry?

• A. They helped sugar farmers while increasing the price of sugar for consumers.
• B. They helped sugar farmers while decreasing the price of sugar for consumers.
• C. They harmed sugar farmers while increasing the price of sugar for consumers.
• They harmed sugar farmers whild decreasing the price of sugar for consumers.

9. Who among the following benefits the most from rent control?

• A. Tenants in rent-controlled apartments.
• B.  Owners of rent-controlled apartments.
• C. People who work maintenance and repairs in rent-controlled apartments.

10. How does the government ensure that farmers receive a target price for their goods?

• A. By granting them nonrecourse loans
• B. By establishing and maintaining price ceilings.
• C. By purchasing and distributing their crops at market prices.
• By forcing certain farm goods to maintain an equilibrium price.