5A Web Quiz.docx - (5A Web Quiz 1 In lesson 3c we learned...

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(5A Web Quiz) 1) In lesson 3c we learned that competitive markets are efficient. In this course we will discuss 6 circumstances when markets are NOT efficient. Which of the following is NOT one of these six? [i.e. Which of the following will achieve allocative efficiency?] Ans: When competitive markets set the price. 2) Which Price Represents an effective price ceiling? Ans: $6 An effective price ceiling must be set below the equilibrium price of $9 3) If a price ceiling is set at $6, what quantity would be available to buy? (This is WHAT WE GET with an effective price ceiling.) Ans: 2,000
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4) If a price ceiling is set at $6, is allocative efficiency being achieved? (Does WHAT WE GET= WHAT WE WANT with this price ceiling?) Ans: No, because at 2,000 the MSB>MSC 5) If a price ceiling is set at $6, what would happen? Ans: A shortage of 3,000
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6) If a price ceiling is set at $12, what would happen? Ans: Nothing 7) Which price represents an effective price floor?
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