Title: Price Ceilings
Course: TEST Course

Q: Price ceilings typically result in ________.
- excess supply
- price equilibrium
- shortages
A: shortages

Q: ________ are generally the result of price ceilings.
- Excess supply
- Price equilibrium
- Shortages
A: Shortages

Q: If the government sets a price ceiling of $8, there would be a(n):
- excess supply of 4 units.
- shortage of 8 units.
- shortage of 4 units.
A: shortage of 4 units.

Q: Refer to the figure below. If the government sets a price ceiling of $6,
- there would be a shortage of 14 units.
- there would be an excess supply of 6 units.
- consumers would demand 14 units.
A: consumers would demand 14 units.

Q: Refer to the figure below. If the government sets a price ceiling at $10, there would be a(n):
- excess supply of 32 units.
- excess supply of 80 units.
- shortage of 24 units.
A: shortage of 24 units.

Q: Refer to the figure below. If the government sets a price ceiling at $20, there would be a(n):
- excess supply of 22 units.
- excess shortage of 26 units.
- shortage of 20 units.
A: shortage of 20 units.

Q: Price ceilings attempt to make consumer prices ________.
- higher
- at equilibrium
- lower
A: lower

Q: The main reason price ceilings are set is so that consumer prices
- will be higher.
- will remain at equilibrium.
- will be lower.
A: will be lower.

Q: Refer to the figure below. If the government sets a price ceiling of $4, there would be a(n):
- excess supply of 4 units
- shortage of 8 units
- shortage of 5 units
A: shortage of 5 units

Q: Refer to the figure below. If the government sets a price ceiling of $8,
- there would be a shortage of 12 units.
- there would be an excess supply of 4 units.
- consumers would demand 12 units.
A: consumers would demand 12 units.

Q: A government decides to set a price ceiling on bread so that bread is affordable to the poor. The conditions of demand and supply are given in the table below. What is the equilibrium price before the price ceiling? What will the excess supply or the shortage be if the price ceiling is set at $2.40?

Price | Qd | Qs
$1.60 | 9,000 | 5,000
$2.00 | 8,500 | 5,500
$2.40 | 8,000 | 6,400
$2.80 | 7,500 | 7,500
$3.20 | 7,000 | 9,000
$3.60 | 6,500 | 11,000
$4.00 | 6,000 | 15,000
- $2.40; 1,600 shortage
- $2.80; 1,600 excess supply
- $2.80; 1,600 shortage
A: $2.80; 1,600 shortage

Q: A government decides to set a price ceiling on milk so that milk is affordable to the poor. The conditions of demand and supply are given in the table below. What will the excess supply or the shortage be if the price ceiling is set at $2.40? What is the equilibrium price before the price ceiling?

Price | Qd | Qs
$1.60 | 9,000 | 5,000
$2.00 | 8,500 | 5,500
$2.40 | 8,000 | 6,400
$2.80 | 7,500 | 7,500
$3.20 | 7,000 | 9,000
$3.60 | 6,500 | 11,000
$4.00 | 6,000 | 15,000
- 1,600 shortage; $2.40
- 1,600 excess supply; $2.80
- 1,600 shortage; $2.80
A: 1,600 shortage; $2.80

Q: A government decides to set a price ceiling on eggs so that eggs are affordable to the poor. The conditions of demand and supply are given in the table below. What will the excess supply or the shortage be if the price ceiling is set at $2.00?

Price | Qd | Qs
$1.60 | 9,000 | 5,000
$2.00 | 8,500 | 5,500
$2.40 | 8,000 | 6,400
$2.80 | 7,500 | 7,500
$3.20 | 7,000 | 9,000
$3.60 | 6,500 | 11,000
$4.00 | 6,000 | 15,000
- 3,000 excess supply
- 8,500 shortage
- 3,000 shortage
A: 3,000 shortage

Q: A government decides to set a price ceiling on potatoes so that potatoes are affordable to the poor. The conditions of demand and supply are given in the table below. What will the excess supply or the shortage be if the price ceiling is set at $2.00?

Price | Qd | Qs
$1.60 | 9,000 | 5,000
$2.00 | 8,500 | 5,500
$2.40 | 8,000 | 6,400
$2.80 | 7,500 | 7,500
$3.20 | 7,000 | 9,000
$3.60 | 6,500 | 11,000
$4.00 | 6,000 | 15,000
- 3,000 excess supply
- 8,500 shortage
- 3,000 shortage
A: 3,000 shortage

Q: A government decides to set a price ceiling on bread of $2.40 so that bread is affordable to the poor. The conditions of demand and supply are given in the table below. What will be the price and quantity of bread purchased?

Price | Qd | Qs
$1.60 | 9,000 | 5,000
$2.00 | 8,500 | 5,500
$2.40 | 8,000 | 6,400
$2.80 | 7,500 | 7,500
$3.20 | 7,000 | 9,000
$3.60 | 6,500 | 11,000
$4.00 | 6,000 | 15,000
- $2.40; 8,000
- $2.00; 7,000
- $2.40; 6,400
A: $2.40; 6,400

Q: A government decides to set a price ceiling on milk of $2.40 so that milk is affordable to the poor. The conditions of demand and supply are given in the table below. What will be the price and quantity of milk purchased?

Price | Qd | Qs
$1.60 | 9,000 | 5,000
$2.00 | 8,500 | 5,500
$2.40 | 8,000 | 6,400
$2.80 | 7,500 | 7,500
$3.20 | 7,000 | 9,000
$3.60 | 6,500 | 11,000
$4.00 | 6,000 | 15,000
- $2.40; 8,000
- $2.00; 7,000
- $2.40; 6,400
A: $2.40; 6,400

Q: Suppose the local government is concerned about the health of local school children, and for that reason imposes a price ceiling of $3 on yogurt. Based on the graph below, which of the following is true?
- The quantity demanded will be 3 yogurts.
- There will be a shortage of 5 yogurts.
- The quantity supplied will be 3 yogurts.
A: The quantity supplied will be 3 yogurts.

Q: Suppose the local government is concerned about the health of local school children, and for that reason imposes a price ceiling of $3 on yogurt. Based on the graph below, which of the following is true?
- The quantity supplied will be 4 yogurts.
- There will be a shortage of 3 yogurts.
- The quantity demanded will be 5 yogurts.
A: The quantity demanded will be 5 yogurts.

Q: Suppose, in the graph below, there is a price ceiling of $3. Then there is a shortage of:
- 3 units.
- 0 units.
- 6 units.
A: 6 units.

Q: Suppose, in the graph below, there is a price ceiling of $6. Then there is a shortage of
- 3 units.
- 6 units.
- 0 units.
A: 0 units.

Q: Suppose, in the graph below, there is a price ceiling of $4. Then there is a shortage of:
- 6 units.
- 0 units.
- 4 units.
A: 4 units.

Q: Suppose, in the graph below, there is a price ceiling of $5. Then there is a shortage of
- 3 units.
- 6 units.
- 2 units.
A: 2 units.

Q: The local government is concerned about poverty so it institutes a minimum wage of $9 per hour. If the demand and supply for labor are given in the graph, there will be
- a total of 3 workers supplied and no surplus workers.
- a total of 3 workers supplied with a shortage of 6 workers.
- a total of 9 workers supplied with a surplus of 6 workers.
A: a total of 9 workers supplied with a surplus of 6 workers.

Q: If a set price attempts to keep prices higher than the equilibrium price it is a(n)
- price ceiling.
- equilibrium price.
- price floor.
A: price floor.

Q: The federal minimum wage is an example of a
- price ceiling.
- rent control.
- price floor.
A: price floor.

Q: Price floors typically result in ________.
- excess demand
- quantity supplied equals quantity demanded
- excess supply
A: excess supply

Q: The local government is concerned about poverty so it institutes a minimum wage of $9 per hour. If the demand and supply for labor are given in the graph, there will be
- a surplus of 3 workers.
- a shortage of 6 workers.
- a surplus of 6 workers.
A: a surplus of 6 workers.

Q: A price floor attempts to keep prices ________.
- lower than the equilibrium price
- at the equilibrium price
- higher than the equilibrium price
A: higher than the equilibrium price

Q: Requiring that all employees get a minimum wage of $8.00 is an example of a
- price ceiling.
- rent control.
- price floor.
A: price floor.

Q: What is a the typical result of a price floor?
- excess demand
- quantity supplied equals quantity demanded
- excess supply
A: excess supply

Q: Supply and demand for bushels of wheat (millions) are shown in the following table. A $10.00 price floor would result in:

Price | Qd | Qs
$5.00 | 26 | 16
$6.00 | 24 | 18
$7.00 | 22 | 20
$8.00 | 21 | 21
$9.00 | 20 | 22
$10.00 | 19 | 23
$11.00 | 18 | 24
- a price of $8.00 and an excess supply of zero.
- a price of $9.00 and an excess supply of 2 million bushels.
- a price of $10.00 and an excess supply of 4 million bushels.
A: a price of $10.00 and an excess supply of 4 million bushels.

Q: Supply and demand for bushels of wheat (millions) are shown in the following table. A $10.00 price floor would result in:

Price | Qd | Qs
$5.00 | 26 | 16
$6.00 | 24 | 18
$7.00 | 22 | 20
$8.00 | 21 | 21
$9.00 | 20 | 22
$10.00 | 19 | 23
$11.00 | 18 | 24
- an excess supply of zero and a price of $8.00.
- an excess supply of 2 million bushels and a price of $9.00.
- an excess supply of 4 million bushels and a price of $10.00.
A: an excess supply of 4 million bushels and a price of $10.00.

Q: Refer to the figure below. If the government set a price floor of $80, the excess supply will be:
- 80.
- 28.
- 16.
A: 16.

Q: Refer to the figure below. If the government sets a price floor of $80, the price would be:
- $30 lower than the equilibrium price.
- The same as the equilibrium price.
- $30 higher than the equilibrium price.
A: $30 higher than the equilibrium price.

Q: If the government sets floor prices for wheat or corn that guarantee farmers an above-market price for that product, the most probable result would be what?
- more suppliers would leave the market
- the market would suffer shortages
- overproduction
A: overproduction

Q: Refer to the figure below. If the government set a price floor of $30, there would be
- excess supply of 16 units.
- excess supply of 12 units.
- zero excess supply.
A: zero excess supply.

Q: Supply and demand for bushels of wheat (millions) are shown in the following table. A $9.00 government mandated price floor would result in

Price | Qd | Qs
$5.00 | 26 | 16
$6.00 | 24 | 18
$7.00 | 22 | 20
$8.00 | 21 | 21
$9.00 | 20 | 22
$10.00 | 19 | 23
$11.00 | 18 | 24
- a shortage of 2 million bushels of wheat.
- zero excess supply.
- an excess supply of 2 million bushels of wheat.
A: an excess supply of 2 million bushels of wheat.

Q: Refer to the figure below. If the government set a price ceiling of $80, the amount bought and sold will be:
- 12.
- 28.
- 20.
A: 20.

Q: A price ceiling creates ________ when it is set ________ the equilibrium price.
- excess demand; above
- excess supply; below
- excess demand; below
A: excess demand; below

Q: A price floor creates ________ when it is set ________ the equilibrium price.
- excess demand; below
- excess supply; below
- excess supply; above
A: excess supply; above

Q: If there is a greater quantity supplied than the quantity demanded, in other words, an excess supply of a good or service you are most likely dealing with a
- price ceiling set below the equilibrium price.
- price floor set below the equilibrium price.
- price floor set above the equilibrium price.
A: price floor set above the equilibrium price.

Q: A price ceiling when it is set ________ the equilibrium price creates ________.
- above; excess demand
- below; excess supply
- below; excess demand
A: below; excess demand

Q: A price floor when it is set ________ the equilibrium price creates ________.
- below; excess demand
- below; excess supply
- above; excess supply
A: above; excess supply

Q: How does a price floor set above the equilibrium price affect quantity demanded and quantity supplied?
- It results in a greater quantity supplied than the quantity demanded, otherwise known as a shortage.
- It results in a smaller quantity supplied than the quantity demanded, otherwise known as a shortage.
- It results in a greater quantity supplied than the quantity demanded, otherwise known as excess supply.
A: It results in a greater quantity supplied than the quantity demanded, otherwise known as excess supply.

Q: If the government set a price ceiling of $40, there would be:
- a shortage (or excess supply) of about 12 units
- a surplus (or excess demand) of about 12 units
- a surplus (or excess demand) of about 8 units
A: a surplus (or excess demand) of about 8 units

Q: Refer to the figure below. If the government set a price ceiling of $40, there would be:
- 12 units sold.
- 28 units sold.
- 16 units sold.
A: 16 units sold.

Q: California last summer was devastated by wildfires that have now created mudslides with the winter rain. This winter highway 1 was closed for weeks as they removed the mud. Because of the closed main road, milk was in greater demand but short on supply. The government put a temporary price ceiling on the cost of milk at $4. If the equilibrium for milk was at $7, what do you think was the result of the price ceiling?
- The equilibrium price dropped to the price ceiling and the supply met the demanded quantity.
- People continued to uphold the law and pay the $4 for milk and there was greater quantity supplied than demanded.
- There was greater demand than supplied and people began a black market for selling milk.
A: There was greater demand than supplied and people began a black market for selling milk.

Q: Alabama this winter was socked in with snow which closed highways, stores and schools for weeks. Because of the road closures, soup was in greater demand but short on supply. The government put a temporary price ceiling on the cost of soup at $1. If the equilibrium for soup was at $5, what do you think happened?
- The equilibrium price dropped to the price ceiling and the supply met the demanded quantity.
- People continued to uphold the law and pay the $1 for soup and there was greater quantity supplied than demanded.
- There was greater demand than supplied and people began a black market for selling and delivering soup.
A: There was greater demand than supplied and people began a black market for selling and delivering soup.