AnswersOC27 Economics-2102310-Sem-MeadowsElasticity and Incentives

Profit Answers

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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.

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.
11

The graph shows the price of a good compared to the quantity supplied.This graph demonstrates how

Question illustration
A
the amount produced slightly changes with the price.
B
the amount produced greatly changes with the price.
C
the amount consumed slightly changes with the price.
D
the amount consumed greatly changes with the price.
12

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

A
breakfast food
B
music player
C
sports equipment
D
video game
13

A reward or punishment that encourges people to behave in a certain way is called a(n)

A
want.
B
price ceiling.
C
equilibrium price.
D
incentive.
14

Which is an example of a negative incentive for producers?

A
a chance to make more money
B
a special sale at a department store
C
a coupon clipped from a newspaper
D
a sharp increase in production costs

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