Market Equilibrium and Price Controls Quiz
Test your knowledge on market equilibrium, price controls, and their impacts with these insightful questions.
#1
What is market equilibrium?
When demand exceeds supply
When supply exceeds demand
When quantity demanded equals quantity supplied
When quantity supplied exceeds quantity demanded
#2
What happens if the price in a market is above the equilibrium price?
Excess demand
Excess supply
No effect on supply and demand
Market clears
#3
Which of the following best describes a market in equilibrium?
Quantity demanded exceeds quantity supplied
Quantity supplied exceeds quantity demanded
Price is determined by suppliers
Quantity demanded equals quantity supplied
#4
Which of the following is NOT a price control?
Price ceiling
Price floor
Price stabilization
Tariff
#5
What is the primary purpose of a price ceiling?
To maintain a minimum price level
To maintain a maximum price level
To prevent shortages
To encourage production
#6
What is the impact of a price ceiling below the equilibrium price?
Surplus
Shortage
Market equilibrium
No effect
#7
Which of the following is NOT a factor that can shift the demand curve?
Changes in consumer income
Changes in the price of substitutes
Changes in technology
Changes in the price of the product
#8
What is the likely consequence of imposing a price ceiling on rental housing in a city with high demand?
Increased availability of rental units
Decreased rental prices
Shortage of rental units
Stabilization of rental market
#9
If the government imposes a price floor above the equilibrium price, what is the likely result?
Shortage
Surplus
Market equilibrium
No effect
#10
What happens to the market price if there is an increase in both demand and supply?
Rise
Fall
Remains unchanged
Depends on the magnitude of the changes
#11
What is the primary objective of price controls during wartime or emergency situations?
To maintain market equilibrium
To ensure fairness
To prevent hoarding
To stabilize prices
#12
How does a subsidy affect the market equilibrium?
It decreases equilibrium price and quantity
It increases equilibrium price and quantity
It has no effect on equilibrium price but increases quantity
It increases equilibrium price but decreases quantity
#13
In a market with a price ceiling, what might suppliers do to respond to the constraint?
Increase production to meet demand
Reduce production due to lower profitability
Lower prices to meet the ceiling
Exit the market due to losses
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