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WorksheetsCh. 6: Pricing System
Total questions: 37
Worksheet time: 31mins
What should the price of this product be? How many will be sold at that price?
$9, 13 items
$10, 15 items
$8, 12 items
$18, 18 items
Why is equilibrium important?
Equilibrium determines the price and quantity that a product should be sold at
Equilibrium determines the price that would be best for consumers
Equilibrium determines the price that would be best for producers
Equilibrium determines the break even point for producers
At what price is the greatest surplus?
$18
$12
$10
$2
At what price is the smallest shortage?
$2
$8
$10
$18
At $4 is the a surplus or shortage? How much of a surplus or shortage?
Surplus of 15 items
Shortage of 5 items
Shortage of 15 items
Surplus of 21 items
Where is the smallest surplus? How much of a surplus is there?
At $18 there is a surplus of 24 items
At $2 there is a surplus of 21 items
At $10 there is a surplus of 3 items
At $8 there is a surplus of 3 items
When there is a surplus what needs to happen to reach equilibrium?
A rain check should be offered.
What needs to happen when there is a shortage to reach equilibrium?
A rebate needs to be offered.
Match the definition with the correct term
Price and quantity increase
Right shift in Demand
Price increases, quantity decreases
Left shift in Supply
Price and quantity decrease
Left shift in Demand
Price decreases, quantity increases
Right shift in Supply
Draw what happens to the graph for Coke when the price of Pepsi increases. (Make sure to label your graph!)
What happens to equilibrium as a result?
Which of the following situations would cause the price of Nike shoes to decrease?
A major factory producing Nike shoes improves working conditions
A popular athlete signs an endorsement deal with Nike
The price of leather, a key input for Nike shoes, increases
Nike is forced to pay higher import tariffs on materials
Which of the following situations would cause the price of coffee beans to increase?
New technology improves the efficiency of coffee bean farming
Consumers think the price of coffee will decrease next week
A drought significantly reduces the coffee bean harvest
The price of tea, a substitute for coffee, decreases
Which of the following situations would cause the price of electric cars to decrease?
More car companies make electric cars
The price of gasoline increases sharply
A major electric car producer faces a labor strike
Consumer reports show declining battery performance in electric cars
Draw what happens to the graph for Starbucks when workers go on strike (Make sure to label your graph!)
What happens to equilibrium as a result?
Which of the following would cause fewer smart TVs to be sold?
A new type of streaming device becomes a popular alternative to smart TVs
Producers expect the price of smart TVs to decrease next month
The price of streaming services drops
The cost of producing smart TVs decreases due to new technology
Which of the following would cause more Schwinn bicycles to be sold?
The price of car fuel increases significantly
Schwinn employees get less vacation days
The price of bicycle helmets increases
Schwinn closes one of their factories
Which of the following would cause fewer video game consoles to be sold?
The price of popular video game titles increases
New competitors enter the video game console market
Average income increases for consumers
The cost of producing video game consoles decreases due to automation
In the smartphone market, the development of cheaper production technology and a new study revealing potential health risks from prolonged smartphone use will result in which of the following to happen to the equilibrium for smartphones?
Price decreases and quantity is unknown
Price increases and quantity is unknown
Quantity increases and price is unknown
Quantity decreases and price is unknown
In the housing market, a shortage of construction materials, making it more expensive to build new homes, combined with a decrease in mortgage interest rates, making it cheaper to buy homes, will result in which of the following to happen to the equilibrium for housing?
Price increases and quantity is unknown
Price decreases and quantity is unknown
Quantity increases and price is unknown
Quantity decreases and price is unknown
In the market for laptops, the introduction of cheaper, faster manufacturing technology makes it easier to produce laptops, while a major increase in remote work. What will happen to the equilibrium for laptops?
Quantity increases and price is unknown
Quantity decreases and price is unknown
Price increases and quantity is unknown
Price decreases and quantity is unknown
In the solar panel market, a government subsidy to produce solar panels, while increasing environmental awareness boosts consumer interest for renewable energy sources. What will happen to the equilibrium for solar panels?
Quantity increases and price is unknown
Quantity decreases and price is unknown
Price increases and quantity is unknown
Price decreases and quantity is unknown
Since cars are demand ________ a change in supply of cars would cause a ________ change in equilibrium price.
Inelastic, small
Elastic, small
Inelastic, large
Elastic, large
In the market for gasoline, the price of crude oil increases significantly. Gasoline has relatively inelastic demand. What will happen to the equilibrium price of gasoline?
Price increases significantly
Price decreases significantly
Price remains the same
Price decreases slightly
When prices for solar panels decrease, more consumers buy them, and manufacturers invest in producing more panels. This process reflects which advantage of the pricing system?
Prices are flexible
Prices are efficient at allocating resources
Prices involve no cost of administration
Prices are neutral
In the labor market, wages rise when companies need more workers, but they can also fall when there are more workers than available jobs. This reflects which advantage of the pricing system?
Prices are flexible
Prices are neutral
Prices involve no cost of administration
Prices are inefficient
Which of the following is NOT an advantage of the pricing system over rationing?
Prices offer the best profit to producers
Prices are flexible
Prices don't cost anything to determine
Prices help resources be used in the best way possible.
A government agency is established to manage the distribution of rationed products, requiring significant time, personnel, and money. What is a key disadvantage of rationing compared to the pricing system in this scenario?
Rationing leads to increased supply
Rationing involves high administrative costs
Rationing makes goods available faster
Rationing encourages efficient resource allocation
Why are price ceilings always set below equilibrium?
Because the equilibrium price is too high
Because the equilibrium price is too low
Because the government is trying to create a shortage
Because the government is trying to make sure everyone gets their fair share
Draw on the graph a good price ceiling for this product.
Does this create a shortage or surplus for this product?
Which of the following would be an example of a price ceiling?
Which of the following is NOT a problem with rent control?
Shortage of apartments
People who can afford higher priced apartments still get rent controlled apartments
Rent controlled apartments aren't good quality
Rent control leads to more apartments being rent controlled
Why are price floors always set above equilibrium?
To create a surplus
Because the equilibrium price is too low
To create a shortage
To ensure everyone gets their fair share of a product.
Draw where a good price floor would be for this product.
What problem does a price floor create?
Which of the following would be an example of a price floor?
Rent control
The government sets a price floor on wheat to ensure farmers receive a minimum income. However, farmers produce more wheat than consumers are willing to buy at the higher price. What is the likely result of this price floor?
A shortage of wheat
A surplus of wheat
An increase in consumer demand for wheat
An improvement in the quality of wheat
Which of the following is NOT a problem with minimum wage?
It can lead to higher unemployment as businesses reduce hiring due to higher labor costs
It can cause prices of goods and services to increase as businesses pass on the higher costs to consumers
It can result in a surplus of workers, where more people want jobs than businesses can afford to hire
It ensures that all workers earn a fair, livable wage, improving the standard of living for low-income workers
Match the definition with the correct term
Gov't sets the highest price that can be charged for a product
Price ceilings
Gov't sets the lowest price that can be paid for a product
Price floors
Example of a price ceiling
Rent control
Example of a price floor
Minimum wage
Advantage of this system is it accommodates change
Pricing System
