Week 8 Quiz Answer Key 1. A consumer’s reservation price is: a.The highest price that the consumer is willing to pay b.The lowest price that the consumer is willing to pay c.The market clearing price d.Equal to the seller’s reservation price e.None of the above 2. When a price floor is imposed below the market price, the result will be that 3. Consumer surplus: 4. Which of the following statements regarding government intervention in markets is true? 5. Which of the following statements regarding price ceilings is true? a.A binding price ceiling may result in an excess demand for a product.b.The short run impact of a price ceiling is always greater than the long run impact. c.Buyers will not be happy with a price ceiling because it forces them to pay a higher market price. d.
All of the above
None of the above.
6. Assuming a market was not initially experiencing a market failure and that buyers and sellers are both responsive to price changes, then the imposition of a binding price ceiling or a binding price floor will always create ______. 7. What do we call the loss of economic surplus that society suffers when the government interferes in a well-functioning free market?