#1
What is a price ceiling?
A maximum price set by the government below the equilibrium price
A minimum price set by the government above the equilibrium price
A price determined solely by market forces
A price floor set by the government above the equilibrium price
#2
Which of the following is an example of a price floor?
Rent control
Minimum wage
Subsidies
Sales tax
#3
What is the term used to describe the situation when a price floor is set above the equilibrium price?
Surplus
Shortage
Equilibrium
Price ceiling
#4
Which of the following is an example of a government-imposed price ceiling?
Minimum wage
Rent control
Sales tax
Subsidies
#5
What term describes the difference between the price consumers are willing to pay and the price they actually pay?
Consumer equilibrium
Consumer surplus
Producer surplus
Market surplus
#6
What is the main purpose of price controls?
To maintain market equilibrium
To increase government revenue
To regulate competition
To address market inefficiencies or inequities
#7
What is a potential consequence of imposing a price ceiling below the equilibrium price?
Excess supply
Excess demand
Decrease in consumer surplus
Increase in producer surplus
#8
What is the primary goal of a price floor?
To prevent prices from falling below a certain level
To encourage consumption of goods
To reduce government intervention in markets
To promote competition among producers
#9
Which of the following is a potential drawback of price controls?
Increased market stability
Reduced consumer choice
Decreased government revenue
Enhanced market efficiency
#10
Which of the following is a consequence of implementing price controls in a market?
Increased market efficiency
Elimination of market equilibrium
Allocation of resources according to consumer preferences
Potential shortages or surpluses
#11
In the context of market interventions, what is deadweight loss?
The loss of revenue experienced by firms
The loss in consumer surplus exceeding the gain in producer surplus
The loss in producer surplus exceeding the gain in consumer surplus
The loss of market demand
#12
What is the likely effect of removing a price ceiling below the equilibrium price?
Decrease in consumer surplus
Increase in producer surplus
Increase in quantity supplied
Increase in deadweight loss
#13
What economic concept is illustrated by the area between the supply and demand curves below the price ceiling?
Consumer surplus
Producer surplus
Market equilibrium
Deadweight loss
#14
What economic concept is represented by the area of deadweight loss?
Loss in consumer surplus exceeding gain in producer surplus
Gain in consumer surplus exceeding loss in producer surplus
Increase in government revenue
Market equilibrium
#15
What economic concept is indicated by the loss in total surplus due to market intervention?
Market equilibrium
Producer surplus
Deadweight loss
Consumer surplus