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Profit Answers

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1
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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?

T
The quantity demanded for bread will decrease, and the quantity supplied will increase.
T
The quantity demanded and quantity supplied for bread will increase.
T
The quantity demanded for bread will increase,and the quantity supplied will decrease.
T
The quantity demanded and quantity supplied for bread will decrease.
2
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In the market, actions known as incentives affect

p
producers only.
c
consumers only.
c
consumers or producers.
n
neither consumers nor producers.
3

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

A
an incentive.
B
a price floor.
C
a price ceiling.
D
an elastic service.
4

The graph shows the price of green tea compared to the amount supplied by producers.What does this graph suggest about green tea? Choose two answers.Green tea is elastic in terms of supply.Green tea is inelastic in terms of supply.Green tea is neither elastic nor inelastic.The supply of green tea changes sharply with the price.The quantity supplied of green tea does not change sharply with the price.

Question illustration
A
Green tea is elastic in terms of supply.
B
Green tea is inelastic in terms of supply.
C
Green tea is neither elastic nor inelastic.
D
The supply of green tea changes sharply with the price.
E
The quantity supplied of green tea does not change sharply with the price.
5

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?

Question illustration
a
an ineffective price floor set above equilibrium causing a surplus.
a
an effective price floor set below equilibrium causing a shortage.
a
an ineffective price ceiling set above equilibrium causing a surplus.
a
an effective price ceiling set below equilibrium causing a shortage.
6

Goods that are considered to be needs tend to be

A
elastic when the price changes.
B
inelastic when the price changes.
C
elastic when the supply changes.
D
inelastic when the supply changes.
7

What is the difference between a price floor and a price ceiling?

A
A price floor is the minimum price allowed for a good. A price ceiling is the maximum price allowed for a good.
B
A price floor is the maximum price allowed for a good. A price ceiling is the minimum price allowed for a good.
C
A price ceiling below the equilibrium price has no effect.
D
A price floor above the equilibrium price has no effect.
8

In economics, if a good is inelastic,

A
consumers have lost an interest in purchasing it.
B
producers have lost an interest in manufacturing it.
C
its supply or demand is too sensitive to price changes.
D
its supply or demand is not sensitive to price changes.
10

Price controls on goods can be set by

A
consumers.
B
economists.
C
governments.
D
producers.

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