Price Ceilings and Price Floors Quiz

If the price floor is set artificially high, it will lead to a surplus of the product.

The purpose of a price floor is to protect producers of a certain good or service by establishing a minimum price.

Price ceilings lead to an increase in quantity demanded and a decrease in quantity supplied, resulting in a shortage.

<p>To protect consumers of a certain good or service by ensuring it is affordable for as many consumers as possible.</p> Signup and view all the answers

<p>A price ceiling will impact the market if it is set below the free-market equilibrium price.</p> Signup and view all the answers

<p>Price ceilings are typically set by governments, although groups that manage exchanges can also set them.</p> Signup and view all the answers

<p>The gain obtained by consumers because they can obtain a product for a lower price than they would be willing to pay.</p> Signup and view all the answers

<p>The benefit producers get by selling at a price higher than the lowest price they would sell for.</p> Signup and view all the answers

<p>The principle that generally, the people who use public services should pay for them with higher taxes.</p> Signup and view all the answers

<p>Direct taxation is assessed on the income of the taxpayer and is generally collected before the taxpayer collects his wages, while indirect taxation is assessed on certain activities, such as purchasing goods or services.</p> Signup and view all the answers