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WorksheetsSupply, Demand, and Government Policies
Total questions: 25
Worksheet time: 18mins
The lowest legal price that can be paid for a product:
Price
Price Ceiling
Price Floor
Surplus
Price where quantity supplied equals quantity demanded.
Equilibrium price
Equilibrium quantity
Price floor
Price
Price floor for agricultural products set by the government to stabilize farm prices:
Surplus
Price
Equilibrium quantity
Target price
What effect would a bumper crop most likely have on the price of that crop?
Increase
Decrease
Equilibrium
Floor
Which term best describes rent control?
Price ceiling
Subsidy
Equilibrium price
Nonrecourse
What is government intervention?
taxes and subsidies
is any action carried out by the government or public entity that affects the market economy
when employees of the government decide to take action after contemplation whilst creating economic models to predict market economy
a consequence of an industrial or commercial activity which affects other parties in turn being reflected in market prices
Which of the following is the most likely explanation for the imposition of a minimum price in the market for corn?
Sellers of corn, recognizing that the price floor is good for them, have pressured policy makers into enacting the price floor.
Buyers of corn, recognizing that the price floor is good for them, have pressured policy makers into enacting the price floor.
Buyers and sellers of corn have agreed that the price floor is good for both of them and have therefore pressured policy makers into enacting the price floor.
Policy makers have studied the effects of the price floor carefully and recognize that the price floor is advantageous for society as a whole.
Which of the following is an argument supporting an increase to the minimum wage?
98.5% of workers earn higher than minimum wage.
Wages have not kept pace with increases in worker productivity.
There will be fewer jobs available for low-skilled workers.
It may increase the cost of bringing goods and services to market.
After the government imposed a $0.20 per gallon tax on gasoline, the price of a gallon of gasoline increased from $1.00 to $1.15. Which of the following statements is true?
Consumers bear the entire burden of the tax, since producers can pass the tax along to consumers.
Consumers bear most, but not all, of the tax burden.
Producers bear the entire burden of the tax, since the tax was levied on producers, not consumers.
There is no tax burden, since gasoline is a normal good.
Where would a binding price ceiling need to be set in this market?
$1500
$1200
$900
$600
What would be created if a binding price floor was imposed at $15.00?
A shortage of 10 units
A surplus of 10 units
A shortage of 5 units
A market clearing quantity of 15 units
The diagram shows a tax on a good rising supply from S1 to S2.
The price to the consumer rises from $4 to $5. What is the amount of tax?
$2
$3
$4
$5
Which regions show the total consumer expenditure after the subsidy is implemented?
D+J+K+L
C +I + D +J
B + E + F +C + I +H + G +D + J + K + L
B + E + F +C + I +H +G
Which regions show the total amount of money spent by the government to fund the subsidy?
D + J + K + L
C + I + D + J
B + E + F + C + I + H + G + D + J + K + L
B + E + F + C + I + H + G
The graph above shows the market for good X The letters in the graph denote the enclosed areas If the government imposes an excise tax of t dollars on each unit of good X, which of the following represents the producer surplus after the imposition of the tax?
A
A + B + C+D
D + E
G
A+B+C
D+E+F
C+E
B+D
what are the disadvantage from the implementation of price regulation as shown in the diagram
the income of producers of farmers is protected
the government may store or keep surplus of goods
low paid workers are better off
lead to wastage of resources
