Market Price Ceilings and Floors Quiz

What is the primary purpose of imposing price ceilings in the market according to the text?

• To increase the overall market prices

• To limit prices from rising too high

• To enhance the profits of producers

• To eliminate consumer surplus

According to the text, what is a common consequence of price ceilings when the equilibrium point is too high?

• They effectively lower the market prices

• They result in a decreased demand for housing

• They have no effect and are considered nonbinding

• They increase the supply of available housing

What does the graph in the text illustrate about the market condition when a binding price ceiling is imposed?

• The market price equals the ceiling price

• The quantity demanded exceeds the quantity supplied

• The producer surplus is larger than the consumer surplus

• The ceiling price is higher than the market equilibrium price

Why are there often large waiting lists in areas with housing ceilings, as mentioned in the text?

• Because the price ceilings increase the quality of housing

• Because more people want to rent due to lower prices and fewer landlords want to rent out their properties

• Because the government imposes strict regulations on new housing developments

• Because landlords are incentivized to create more rental properties

Tags

CCSS.RI.11-12.5

CCSS.RI.6.5

CCSS.RI.7.5

CCSS.RI.8.5

CCSS.RI.9-10.5

What is the primary function of wage floors according to the text?

• To increase government revenue

• To help the poor by setting minimum wage standards

• To decrease the number of jobs available

• To create price instability in the market

What is the consequence of setting a wage above the market equilibrium, as mentioned in the text?

• It decreases the number of people willing to work

• It increases the number of people willing to work

• It has no effect on the willingness to work

• It reduces the wage to below the equilibrium

According to the text, what is deadweight loss a measure of?

• Government spending

• Market stability

• Economic efficiency

• Consumer confidence

What role do price floors and ceilings play in the market, as discussed in the text?

• They ensure that all products are affordable

• They prevent any form of economic intervention

• They create market inefficiencies

• They stabilize all economic activities

What is the government's response to the inefficiencies caused by price floors and ceilings, as mentioned in the text?

• They ignore the inefficiencies

• They intervene to further limit surpluses and shortages

• They reduce their economic activities

• They increase the number of price controls

What is the primary effect of price ceilings on market equilibrium according to the lesson summary?

• A) They ensure a minimum price is maintained.

• B) They cause a surplus due to more producers wanting to make more goods.

• C) They cause a shortage due to the market not being at equilibrium.

• D) They eliminate the need for government intervention.