2. USAEO Microeconomics

Price Ceilings And Price Floors — Quiz

Test your understanding of price ceilings and price floors with 5 practice questions.

Practice Questions

Question 1

Which of the following is a likely outcome of a binding price ceiling set below the equilibrium price in a competitive market?

Question 2

If a price floor is implemented above the equilibrium price, what is the most likely impact on the quantity supplied and the quantity demanded?

Question 3

Suppose the equilibrium price of a good is $10 and the government imposes a price ceiling of $8. If the supply function is given by $Q_s = 2P$ and the demand function is $Q_d = 50 - P$, what is the resulting shortage in the market?

Question 4

Which of the following is an unintended effect of a binding price floor in the labor market (such as a minimum wage) over time?

Question 5

A city imposes a rent control (price ceiling) on apartments at $600 per month, while the equilibrium rent is $900 per month. Which of the following is a likely long-term consequence in the housing market?