Elasticity and Incentives

Question 1

Price controls on goods can be set by

Revolt · Accepted Answer

governments.

Question 2

In economics, if a good is inelastic,

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its supply or demand is not sensitive to price changes.

Question 3

In the market, actions known as incentives affect

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consumers or producers.

Question 4

The lowest amount a manufacturer can pay factory workers is an example of

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a price floor.

Question 5

Goods that are considered to be needs tend to be

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inelastic when the price changes.

Question 6

The graph shows the price of a good compared to the quantity demanded and the quantity supplied.On this graph, what does the green arrow represent?

Revolt · Accepted Answer

an effective price ceiling set below equilibrium causing a shortage.

Question 7

Which is an example of a negative incentive for producers?

Revolt · Accepted Answer

a sharp increase in production costs

Question 8

A pair of stylish sneakers could be considered a because it is not a necessity.

Revolt · Accepted Answer

want

Question 9

Which is an example of a product that is considered a need?

Revolt · Accepted Answer

breakfast food

Question 10

The government has set a price floor on bread. Manufacturers cannot sell loaves for less than $5.00, which is a dollar above the market price. What will most likely result from this price control?

Revolt · Accepted Answer

The quantity demanded for bread will decrease, and the quantity supplied will increase.

Elasticity and Incentives Answers

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