Price Ceiling and Price Floor

A price ceiling will usually result in a

• surplus

• quota rent

• wedge

• shortage

One major argument in favor of price ceilings and price floors is that

• they cause black markets to emerge

• a small group of people benefit while a large group suffers

• they create unnecessary shortages and surpluses

• they can correct allocation problems in certain markets

A price control placed above the equilibrium price.

• Shortage

• Binding Price Floor

• Inefficient Markets

• Surplus

A price floor will usually result in a

• Surplus

• quota rent

• shortage

• wedge

A maximum price consumers are required to pay for a good or service.

• Price Ceiling

• Equilibrium

• Market Clearing Price

• Price Floor

A minimum price consumers are required to pay for a good or service.

• Price Ceiling

• Market Clearing Price

• Equilibrium

• Price Floor

A presidential candidate promises that if elected, they will ensure that nobody will spend more than 20% of their monthly income on housing. What concept is this candidate promising?

• housing equilibrium

• a housing surplus

• a housing price floor

• a housing price ceiling

What is a price ceiling?

• A limit on how high a price can be charged for a product.

• A minimum price set by the government.

• A tax imposed on luxury goods.

• A subsidy given to producers.

Which of the following is a likely consequence of a price floor?

• Shortage

• Surplus

• Equilibrium

• Deflation

What is the primary purpose of implementing a price ceiling?

• To ensure producers receive a fair price.

• To prevent prices from falling too low.

• To make essential goods affordable for consumers.

• To increase government revenue.