, Question 2
Fixing a minimum price for oranges below the equilibrium price will lead to an excess demand for
oranges.
ANSWER: False
Question 3
Fixing a maximum price at the level of the equilibrium price will give rise to an excess demand for
the product concerned.
ANSWER: False.
Question 4
Fixing a maximum price for meat above the equilibrium price will result in an excess supply of meat.
ANSWER: False
Question 5
Fixing a maximum price below the equilibrium price may lead to queues and black-market activity.
ANSWER: True
Question 6
What is a typical unintended consequence of a price ceiling?
ANSWER: Long-term shortages
Question 7
What is the main objective of a government-imposed minimum price in a competitive market?
ANSWER: To support specific industries
Question 8
A government introduces a price floor on wheat, ensuring farmers receive at least R10 per bushel
while the market price is R7. What is the likely outcome?
ANSWER: A surplus of wheat as supply exceeds demand
Question 9
If a price ceiling is set above the equilibrium price, what will be the result?
ANSWER: No effect on the market
Fixing a minimum price for oranges below the equilibrium price will lead to an excess demand for
oranges.
ANSWER: False
Question 3
Fixing a maximum price at the level of the equilibrium price will give rise to an excess demand for
the product concerned.
ANSWER: False.
Question 4
Fixing a maximum price for meat above the equilibrium price will result in an excess supply of meat.
ANSWER: False
Question 5
Fixing a maximum price below the equilibrium price may lead to queues and black-market activity.
ANSWER: True
Question 6
What is a typical unintended consequence of a price ceiling?
ANSWER: Long-term shortages
Question 7
What is the main objective of a government-imposed minimum price in a competitive market?
ANSWER: To support specific industries
Question 8
A government introduces a price floor on wheat, ensuring farmers receive at least R10 per bushel
while the market price is R7. What is the likely outcome?
ANSWER: A surplus of wheat as supply exceeds demand
Question 9
If a price ceiling is set above the equilibrium price, what will be the result?
ANSWER: No effect on the market
