Mod 28.B: Price and Quantity Controls

Another name for a quantity control is

• a wall

• a free market

• equilibrium

• a quota

• a blockade

Binding quotas lead to which of the following? (CHOOSE 2)

• a higher quantity sold

• higher demand for a product

• 1. deadweight loss

• a shortage in the market

• increase quality in the market

An effective minimum wage law:
(CHOOSE 2)

• is a price ceiling

• is a price floor

• is set above equilibrium

• is set below equilibrium

• creates a shortage of workers

A rent control law:
(CHOOSE 2)

• is a price ceiling

• is a price floor

• is set above equilibrium

• creates a suplus of rental units

• creates a shortage of rental units

Which of the following is a true statement about government intervention in the market? (CHOOSE ALL THAT APPLY)

• taxes generate revenue for the govenment

• price ceilings allow workers to make more money

• subsidies help businesses produce more goods and lower the price of goods for consumers

• price floors create an incentive for consumers to purchase more goods

• quotas are used to limit the amount of a good that is produced or to make businesses produce more goods