Economics Chapter 6 & 7 Test Review

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

• True
• False

In the United States, prices are determined entirely by the actions of buyers and sellers.

• True
• False

. Price floors and price ceilings keep items from attaining their equilibrium prices.

• True
• False

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

• True
• False

The government sometimes “fixes” prices to achieve a socially desirable goal

• True
• False

How would an economist characterize a local government increasing property taxes to improve the school system?

• laissez-faire in action
• an example of collusion
• a cease and desist order
• subsidizing a positive externality

We say the United States has a “modified” free enterprise economy because almost everything we do and everything we buy is in some way affected by ______

• business.
• money.
• government.
• inventors.

In the economic term oligopoly, the word part olig- probably means

• “few.”
• “single.”
• “all.”
• “one.”

Which of these is a major problem in the execution of a rationing system?

• market spikes
• price neutrality
• price flexibility
• administrative expense

. Which rationing method was instituted for gasoline in the mid-1970s?

• distribution of ration vouchers
• administration of gas sales through post offices
• manufacturing of more fuel-efficient automobiles
• purchasing days determined by license plate numbers