Price ceilings cause
a. Some suppliers to drop out of the market
b. A decrease in the total production in the market
c. The creation of black markets
d. All the above
QUESTION 2An example of price floor is
a. Minimum wages
b. Rent controls in New York
c. Both a and b
d. None of the above
QUESTION 3A price ceiling can often be viewed as:
a. the government setting price above market equilibrium price.
b. an implicit tax on producers and an implicit subsidy to consumers.
c. the government setting price below market equilibrium price.
d. Both b and c.
QUESTION 4Subsidies can destroy wealth because
a. subsidies move assets from lower- to higher- valued uses
b. subsidies move assets from higher- to lower- valued uses
c. subsidies help producers only
d. subsidies help consumers only
QUESTION 5Economic reasoning is based on the premise that:
a. all decisions or actions are costless.
b. only non-economic decisions or actions have a cost associated with them.
c. only economic decisions or actions have a cost associated with them.
d. all decisions and actions have a cost associated with them.
QUESTION 6Taxes cause:
a. Market distortions
b. A reduction in incentives to work
c. A decrease in wealth creating transactions
d. All of the above
QUESTION 7Price gouging
a. Outlaw trade at prices above a certain price level
b. Outlaw trade at prices below a certain price level
c. Is an act of charging a high price to take advantage of shortages created by natural disasters
d. None of the above
QUESTION 8Rent controls
a. are an example of price floors.
b. are an example of price ceilings.
c. destroy wealth by preventing the movement of apartments to higher-valued use.
d. Both b and c
QUESTION 9Price floors are primarily intended to help
a. No one
b. Consumers
c. Producers
d. Government
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