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ANSWER: c
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ECON.MANK.15.26 - LO: 6-0
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Thinking Like an Economist
KEYWORDS: BLOOM'S: Knowledge
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ECON.MANK.15.26 - LO: 6-0
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Public Economics
KEYWORDS: BLOOM'S: Application
1396 Supply, Demand, and Government Policies
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ECON.MANK.15.26 - LO: 6-0
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply
and Demand Rent
Control
KEYWORDS: BLOOM'S: Knowledge
ANSWER: c
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ECON.MANK.15.26 - LO: 6-0
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply
and Demand
Minimum Wage
KEYWORDS: BLOOM'S: Knowledge
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Supply, Demand, and Government Policies
1397
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.15.26 - LO: 6-0
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply
and Demand
Price Controls
KEYWORDS: BLOOM'S: Comprehension
NOTES: r
6. The presence of a price control in a market for a good or service usually is an indication that
a. an insufficient quantity of the good or service was being produced in that market to meet the
public’s need.
b. the usual forces of supply and demand were not able to establish an equilibrium price in that
market.
c. policymakers believed that the price that prevailed in that market in the absence of price
controls was unfair to buyers or sellers.
d. policymakers correctly believed that price controls would generate no inequities of their own
once imposed.
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.15.26 - LO: 6-0
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply
and Demand
Price Controls
KEYWORDS: BLOOM'S: Comprehension
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
1398 Supply, Demand, and Government Policies
7. Price controls
a. always produce a fair outcome.
b. always produce an efficient outcome.
c. can generate inequities of their own.
d. All of the above are correct.
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.15.26 - LO: 6-0
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply
and Demand
Price Controls
KEYWORDS: BLOOM'S: Comprehension
ANSWER: b
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ECON.MANK.15.26 - LO: 6-0
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Taxes
KEYWORDS: BLOOM'S: Knowledge
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Supply, Demand, and Government Policies
1399
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply and
Demand Equilibrium
KEYWORDS: BLOOM'S: Comprehension
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply and Demand
KEYWORDS: BLOOM'S: Comprehension
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
1400 Supply, Demand, and Government Policies
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply and Demand
KEYWORDS: BLOOM'S: Comprehension
4. A legal maximum on the price at which a good can be sold is called a price
a. floor.
b. subsidy.
c. support.
d. ceiling.
ANSWER: d
POINTS: 1
DIFFICULTY: Easy
LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply
and Demand
Price Ceilings
KEYWORDS: BLOOM'S: Knowledge
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Supply, Demand, and Government Policies
1401
5. A price ceiling is
a. often imposed on markets in which “cutthroat competition” would prevail without a price ceiling.
b. a legal maximum on the price at which a good can be sold.
c. often imposed when sellers of a good are successful in their attempts to convince the
government that the market outcome is unfair without a price ceiling.
d. All of the above are correct.
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply
and Demand
Price Ceilings
KEYWORDS: BLOOM'S: Comprehension
6. Which of the following is the most likely explanation for the imposition of a price ceiling on the
market for milk?
a. Policymakers have studied the effects of the price ceiling carefully, and they recognize that
the price ceiling is advantageous for society as a whole.
b. Buyers of milk, recognizing that the price ceiling is good for them, have pressured policymakers
into imposing the price ceiling.
c. Sellers of milk, recognizing that the price ceiling is good for them, have pressured policymakers
into imposing the price ceiling.
d. Buyers and sellers of milk have agreed that the price ceiling is good for both of them and
have therefore pressured policymakers into imposing the price ceiling.
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply
and Demand
Price Ceilings
KEYWORDS: BLOOM'S: Comprehension
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
1402 Supply, Demand, and Government Policies
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply
and Demand Price
Ceilings
KEYWORDS: BLOOM'S: Comprehension
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply and
Demand
Price Ceilings
KEYWORDS: BLOOM'S: Comprehension
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Supply, Demand, and Government Policies
1403
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply and
Demand
Price Ceilings
KEYWORDS: BLOOM'S: Comprehension
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply
and Demand
Price Ceilings
KEYWORDS: BLOOM'S: Comprehension
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
1404 Supply, Demand, and Government Policies
11. Which of the following observations would be consistent with the imposition of a binding price
ceiling on a market?
After the price ceiling becomes effective,
a. a smaller quantity of the good is bought and sold.
b. a smaller quantity of the good is demanded.
c. a larger quantity of the good is supplied.
d. the price rises above the previous equilibrium.
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply
and Demand
Price Ceilings
KEYWORDS: BLOOM'S: Comprehension
12. Suppose the government has imposed a price ceiling on laptop computers. Which of the
following events could transform the price ceiling from one that is not binding into one that is
binding?
a. Improvements in production technology reduce the costs of producing laptop computers.
b. The number of firms selling laptop computers decreases.
c. Consumers' income decreases, and laptop computers are a normal good.
d. The number of consumers buying laptop computers decreases.
ANSWER: b
POINTS: 1
DIFFICULTY: Challenging
LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply
and Demand
Price Ceilings
KEYWORDS: BLOOM'S: Analysis
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Supply, Demand, and Government Policies
1405
13. Suppose the government has imposed a price ceiling on sliced sandwich bread. Which of the
following events could transform the price ceiling from one that is binding to one that is not
binding?
a. An increase in the price of flour, which is used to make bread.
b. A decrease in the price of lunch meat.
c. A decease in the price of unsliced bread, which people consider as a substitute for sliced
bread.
d. An decrease in the price of peanut butter and jelly.
ANSWER: d
POINTS: 1
DIFFICULTY: Challenging
LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply
and Demand
Price Ceilings
KEYWORDS: BLOOM'S: Analysis
NOTES: r
14. If the government removes a binding price ceiling from a market, then the price paid by buyers
will
a. increase, and the quantity sold in the market will increase.
b. increase, and the quantity sold in the market will decrease.
c. decrease, and the quantity sold in the market will increase.
d. decrease, and the quantity sold in the market will decrease.
ANSWER: a
POINTS: 1
DIFFICULTY: Challenging
LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply
and Demand
Price Ceilings
KEYWORDS: BLOOM'S: Analysis
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
1406 Supply, Demand, and Government Policies
15. If the government removes a binding price ceiling from a market, then the price received by
sellers will
a. decrease, and the quantity sold in the market will decrease.
b. decrease, and the quantity sold in the market will increase.
c. increase, and the quantity sold in the market will decrease.
d. increase, and the quantity sold in the market will increase.
ANSWER: d
POINTS: 1
DIFFICULTY: Challenging
LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply
and Demand
Price Ceilings
KEYWORDS: BLOOM'S: Analysis
ANSWER: a
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply
and Demand
Price Ceilings
KEYWORDS: BLOOM'S: Comprehension
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Supply, Demand, and Government Policies
1407
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply
and Demand
Price Ceilings
KEYWORDS: BLOOM'S: Comprehension
18. Which of the following would be the least likely result of a binding price ceiling imposed on the
market for rental cars?
a. an accumulation of dirt in the interior of rental cars
b. poor engine maintenance in rental cars
c. free gasoline given to people as an incentive to a rent a car
d. slow replacement of old rental cars with newer ones
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply
and Demand
Price Ceilings
KEYWORDS: BLOOM'S: Application
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
1408 Supply, Demand, and Government Policies
19. Which of the following would be the most likely result of a binding price ceiling imposed on the
market for rental cars?
a. frequent rental programs such as “Rent nine times and the tenth rental is free!”
b. enhanced maintenance programs to promote the high quality of the cars
c. free gasoline given to people as an incentive to a rent a car
d. slow replacement of old rental cars with newer ones
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply
and Demand
Price Ceilings
KEYWORDS: BLOOM'S: Application
ANSWER: c
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply
and Demand
Price Ceilings
KEYWORDS: BLOOM'S: Comprehension
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Supply, Demand, and Government Policies
1409
ANSWER: d
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply
and Demand
Price Ceilings
KEYWORDS: BLOOM'S: Comprehension
ANSWER: b
POINTS: 1
DIFFICULTY: Moderate
LEARNING OBJECTIVES: ECON.MANK.15.27 - LO: 6-1
NATIONAL STANDARDS: United States - BUSPROG: Analytic
TOPICS: DISC: Supply
and Demand
Price Ceilings
KEYWORDS: BLOOM'S: Comprehension
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
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