#1
What is a price ceiling?
A legal maximum price that can be charged for a good or service
A legal minimum price that must be charged for a good or service
A tax imposed on a good or service
A subsidy provided to producers
#2
What is a likely consequence of a price ceiling set below the market equilibrium price?
Excess demand or a shortage
Excess supply or a surplus
Equilibrium price will remain unchanged
There will be no effect on the market
#3
What is the primary aim of implementing a price ceiling?
To increase producer surplus
To reduce consumer surplus
To make goods more affordable for consumers
To encourage oversupply in the market
#4
Which of the following is NOT a consequence of a price ceiling?
Shortage of the good
Excess supply of the good
Creation of black markets
Reduction in quality of the good
#5
What happens to the quantity demanded when a price ceiling is imposed below the equilibrium price?
Quantity demanded decreases
Quantity demanded increases
Quantity demanded remains the same
Quantity demanded becomes infinite
#6
Which of the following is an economic effect of a price ceiling?
Increase in quantity supplied
Decrease in consumer surplus
Increase in producer surplus
Increase in market equilibrium price
#7
What can lead to black markets when price ceilings are imposed?
Excess supply
Excess demand
Equilibrium price
Price flexibility
#8
How does a price ceiling affect the incentives for producers?
It encourages them to produce more
It discourages them from producing
It has no impact on their incentives
It encourages innovation in production methods
#9
In the long run, what can happen to the availability of goods and services under a price ceiling?
They become more abundant
They become scarce
They become available at a higher price
They become available at a lower quality
#10
What is one way producers may respond to a price ceiling?
Increasing supply
Decreasing quality
Decreasing quantity supplied
Decreasing prices even further
#11
How do economists generally view price ceilings in terms of their long-term effects?
They are always beneficial for consumers
They usually lead to efficient allocation of resources
They can create inefficiencies and distortions in markets
They have no impact on market equilibrium
#12
Under what conditions might a government decide to implement a price ceiling?
To support producers during a recession
To increase tax revenue
To ensure equitable distribution of goods
To encourage consumer saving
#13
What economic concept suggests that there are no free lunches, even with price ceilings?
Law of demand
Law of supply
Law of unintended consequences
Law of diminishing returns
#14
What is the primary concern of economists regarding the long-term effects of price ceilings?
Decrease in government revenue
Creation of a surplus of goods and services
Creation of inefficiencies and distortions in markets
Increase in producer surplus
#15
Which of the following is a criticism of price ceilings?
They lead to efficient allocation of resources
They encourage excessive production
They create inefficiencies and distortions
They stabilize market prices