Simple Application of Price Theory - SS2 Economics Past Questions and Answers - page 1
1
What is minimum price legislation?
View related lesson
A
A government-imposed minimum price for a good or service.
B
A government-imposed maximum price for a good or service.
C
A government subsidy paid to producers of a good or service.
D
A tax on the production of a good or service.
2
What is maximum price legislation?
View related lesson
A
A government subsidy paid to consumers of a good or service.
B
A government-imposed minimum price for a good or service.
Â
C
A government-imposed maximum price for a good or service.
D
A tax on the consumption of a good or service.
3
What is the likely outcome of setting a minimum price above the equilibrium price?
View related lesson
A
No effect on the market outcome.
B
A shortage of the good or service.
C
A surplus of the good or service.
D
An increase in demand for the good or service.
4
What is the likely outcome of setting a maximum price below the equilibrium price?
View related lesson
A
A shortage of the good or service.
B
A surplus of the good or service.
Â
C
No effect on the market outcome.
D
A decrease in demand for the good or service.
5
How can minimum price legislation affect market outcomes?
View related lesson
Loading lesson…