1. A price ceiling is characterized by
A. A price set below the current (or equilibrium) market price of the good.
B. A price set above the current (or equilibrium) market price of the good.
C. A shift of the demand curve(function).
D. A shift of the supply curve.
2. For which of the following statements are both the price change and quantity change determinable (for a particular good)?
A. Both the supply of and the demand for the good decrease.
B. Both the supply of and the demand for the good increase.
C. The supply increases and the demand for the good decreases.
D. The supply decreases and the demand for the good increases.
E. None of the above.
3. If the government subsidizes the production of halogen headlights,
A. The demand curve will shift to the left.
B. The demand curve will shift to the right.
C. The supply curve will shift to the left.
D. The supply curve will shift to the right.
E. The amounts demanded will increase along the demand curve.
4. If consumers are advised that multigrained bread will substantially lessen the risk of cancer, which of the following will happen in the market for multigrained bread?
5. A. the demand curve will shift to the left, decreasing the price of multigrained bread.
B. the supply curve will shift to the left, increasing the price of multigrained bread.
C. the demand curve will shift to the right, increasing the price of multigrained bread.
D. the supply curve will shift to the right, decreasing the price of multigrained bread.
E. none of the above.
5. For each of the following simultaneous changes in demand and in supply for a product, indicate the effect on equilibrium price and equilibrium quantity.
A. increase in demand and an increase in supply
B. decrease in demand and a decrease in supply
C. increase in demand and a decrease in supply
How might a government establish a price ceiling or price floor to offset any one of the changes(A,B,C)above?Explain.
