Micro-Economics Ch 5 Questions

Micro-Economics Ch 5 Questions - Name: _ Date: _ 1. A price...

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Name: __________________________ Date: _____________ 1. A price control is: A) when a firm controls the price of the good it produces. B) a legal restriction on how high or low a price in a market may go. C) an upper limit on the quantity of some good that can be bought or sold. D) a tax placed on the sale of a good which controls the market price. 2. A binding price ceiling is designed to: A) keep prices low. B) increase the quality of the good. C) prevent shortages. D) increase efficiency. 3. Rapidly increasing health costs have been a major political concern since at least 1992. Suppose that to control rising health costs the government sets the maximum price for a normal doctor's visit at $20, but the current market price is $40. Then: A) more people will try to visit the doctor, but the doctor will see fewer patients. B) the same number of people will try to visit the doctor, and the doctor will see the same number of patients. C) more people will be able to see the doctor, since the price is lower. D) fewer people will try to see the doctor, and the doctors will see fewer patients. 4. The government decides to impose a price ceiling on a good, because it thinks the market-determined price is “too high.” If the government imposes the price ceiling below the equilibrium price: A) consumers will respond to the lower price and therefore wish to purchase more of the good than at the equilibrium price. B) producers will respond to the lower price and therefore offer more units for sale. C) consumers will be able to purchase more of the good after the price ceiling is imposed. D) it will not be binding. 5. The government imposes a price ceiling below the equilibrium price. The price ceiling will cause: A) quantity demanded to decrease. B) quantity supplied to increase. C) a shortage of the good. D) an increase in the quality of the good. Page 1
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6. Which of the following is an example of a black market? A) a tenant in a rent-controlled apartment subletting at a higher rent
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This note was uploaded on 12/02/2011 for the course ECONOMICS 202 taught by Professor Black during the Fall '08 term at Boise State.

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Micro-Economics Ch 5 Questions - Name: _ Date: _ 1. A price...

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