WorksheetsPrices Chapter Review
Total questions: 25
Worksheet time: 13mins
What is the government’s goal in buying excess crops or other agricultural products?
to raise minimum wage
to set a price floor
to set legal price ceilings
to lower prices
Which of the following are ways the government controls markets?
price ceilings and price floors
equilibrium price and equilibrium point
shortages and surpluses
None of the above
Why does a government place price ceilings, such as rent control, on some “essential” goods?
to keep people from starting new businesses
to encourage businesses to produce more
to keep the goods from becoming too expensive
to lower demand for these goods
What happens after the demand for a fad drops?
The quantity supplied goes down, and the price goes up.
The quantity supplied and the price both go up.
Shortage makes the good difficult to obtain.
Excess supply makes the good easy to obtain.
What happened when the supply of digital cameras increased?
The supply curve moved to the left.
The supply curve moved to the right.
The demand curve moved to the right.
The demand curve moved to the left.
What did suppliers do when the supply of digital cameras increased?
Suppliers could not keep up with demand for cameras.
Suppliers decreased their inventory of digital cameras.
Suppliers raised prices on cameras.
Suppliers lowered prices on cameras.
How do price changes drive markets toward equilibrium?
They set new price floors and ceilings.
They increase or decrease supply or demand.
They ensure more people buy chipotle
They prevent inflation or deflation.
How does rationing encourage black markets?
Rationing creates high demand.
Rationing causes criminal behavior.
Rationing creates high supply.
Rationing wrecks the market.
What does a low price tell suppliers?
Not enough of a product is being produced.
Too much of a product is being produced.
Demand for a product will go up.
Demand for a product will go down.
On which kinds of goods do governments generally place price ceilings?
those that are cheap but could become more expensive without the ceiling
those that are not necessary but have become customary
those that are essential and cheap
those that are essential but too expensive for some consumers
Why did the U.S. government use rationing for some foods and consumer goods during World War II?
to guarantee each civilian a minimum standard of living in wartime
to keep sellers from raising prices on nonessential goods
because the British government had also decided on rationing
to earn more money to support the military
How does the free market benefit from the profit incentive?
The profit incentive is a signal to buy more of a good.
The profit incentive contributes to the wealth of nations.
The profit incentive promotes efficient resource allocation.
The profit incentive leads to rationing.
In response to rising car traffic, demand for bicycles has increased. The new equilibrium point will show
more bicycles sold, but at a higher price.
fewer bicycles sold, but at a higher price.
more bicycles sold, but at a lower price.
fewer bicycles sold, but at a higher price.
Which of the following is most likely to lead directly to a black market?
a supply shock
a price floor
rationing
equilibrium
Adam Smith wrote that producers are motivated to provide the goods people need by the
profit incentive.
nation’s laws.
desire to do good.
supply curve.
In a free market, prices lead to an efficient allocation of resources. In other words,
consumers can buy unlimited amounts of any good they like at a price of their choice.
resources are used in the most valuable and productive way according to the desires of consumers and producers.
the government decides who controls natural resources.
people who own resources are unable to bargain with people who wish to buy resources.
Why do fads often lead to shortages, at least in the short term?
Buyers and sellers are unable to agree on a price for the good.
Laws prevent stores from responding to excess demand in time to prevent a shortage.
Manufacturers charge such high prices for the goods that stores are unwilling to pay.
Demand increases too quickly and unexpectedly for the supply to keep up.
Which newspaper headline will most likely shift the demand curve for flu shots to the right?
New Inhaler Protects Against Flu Without Shot
Contaminated Flu Vaccine Sickens Recipients
Suppliers Produce a Surplus of Flu Vaccine
Health Experts Predict Severe Flu Season Ahead
Which of the following describes this situation: buyers buy as much of a good as sellers are willing to sell at that price?
supply shock
excess demand
equilibrium point
price floor
Which traffic signal best shows what an SUV manufacturer should do when SUV prices go down?
green light: produce more SUVs
green light: hire more workers
red light: fire all workers
red light: produce fewer SUVs
Elena is looking for an apartment. Which of the following is an example of her search costs?
Elena pays movers $400 to help her move to the new apartment.
Elena loses two days of pay when she misses work to look for an apartment.
Elena pays $300 to stay at a hotel for four nights before the apartment is ready.
Elena must pay an extra month’s rent before she can move into a new apartment.
Which of the following causes excess demand?
The demand curve shifts to the left.
The quantity supplied is greater than the demand.
The government provides subsidies to producers.
The market price is below the equilibrium price.
How do prices encourage the efficient movement of resources from producers to consumers?
Prices keep producers’ profits high.
Prices make goods available to everyone.
Prices help people decide what to sell and buy.
Prices are set by the government so that prices are fair.
Excess demand is also known as _____.
a surplus
an equilibrium
a shortage
production possibilities
Excess supply is also known as _____.
a surplus
an equilibrium
a shortage
production possibilities
