Price Ceiling and Price Floor
Economics ⇒ Markets and Price Determination
Price Ceiling and Price Floor starts at 12 and continues till grade 12.
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See sample questions for grade 12
A price ceiling set above the equilibrium price will have what effect?
Describe how a price floor can lead to government intervention in the form of buffer stocks.
Describe the effect of a price floor on the supply and demand of a commodity.
Explain how a price floor can distort market equilibrium.
Explain the difference between price ceiling and price floor.
If a price ceiling is set at ₹80 per unit and the equilibrium price is ₹100 per unit, what is the likely result?
If the equilibrium price of rice is ₹50 per kg and the government sets a price floor at ₹60 per kg, calculate the likely market outcome.
If the government sets a price ceiling on onions at ₹30 per kg, but the equilibrium price is ₹40 per kg, what is the likely market outcome?
Which of the following is a direct effect of a price floor? (1) Shortage, (2) Surplus, (3) Equilibrium, (4) Black market
Which of the following is a likely effect of a price ceiling on the quality of goods? (1) Quality improves, (2) Quality remains unchanged, (3) Quality deteriorates, (4) No effect
Which of the following is a likely unintended consequence of a price ceiling? (1) Improved quality, (2) Black marketing, (3) Increased supply, (4) Higher prices
Which of the following is a possible government response to surplus caused by a price floor? (1) Rationing, (2) Import restrictions, (3) Buffer stock operations, (4) Price ceiling
A price floor is set ______ the equilibrium price to be effective.
A price floor will be ineffective if it is set ______ the equilibrium price.
Fill in the blank: A price ceiling is effective only if it is set ______ the equilibrium price.
Fill in the blank: Price ceiling is a ______ price limit imposed by the government.
True or False: A price ceiling always benefits all consumers.
True or False: A price floor leads to excess supply if set above the equilibrium price.
True or False: A price floor set below equilibrium price will have no effect on the market.
True or False: Price ceilings can lead to deterioration in the quality of goods.
