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Unit test on price ceilings and price floors. Demonstrate understanding of key vocabulary (ceiling, floor, shortage, surplus) and predict likely market outcomes when price controls are set above or below the market price.

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A price ceiling is a law that sets a ______ price.

average

minimum

market

maximum

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A price floor is a law that sets a ______ price.

maximum

minimum

market

average

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A price ceiling is usually used to make goods ______.

cheaper

illegal

rare

more expensive

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A price floor is usually used to help ______.

buyers pay less

sellers earn more

taxes go down

demand disappear

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If a price ceiling is set below the market price, the most likely result is a:

surplus

shortage

no change

higher equilibrium

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If a price floor is set above the market price, the most likely result is a:

no change

surplus

shortage

lower price

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Which word best matches shortage?

lower taxes

not enough supply

higher wages

extra leftovers

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Which word best matches surplus?

less money

extra leftovers

higher demand

not enough supply

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A city limits rent increases and sets a legal maximum rent for apartments. This is a:

price ceiling

subsidy

price floor

sales tax

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If rent control sets rent below the market rent, what is most likely?

fewer apartments available than wanted

wages go down

more apartments available than needed

landlords must sell food

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A state sets a minimum wage of $$16$/hour. This is a:

surplus of demand

price floor on labor

price ceiling on labor

shortage of money

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If minimum wage is set above the market wage for some jobs, which could happen?

all prices fall

demand disappears

more workers hired

fewer workers hired

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After a hurricane, a state sets a maximum price for bottled water to stop very high prices. This is a:

quota

price ceiling

tariff

price floor

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A possible result of a very low maximum price on bottled water is:

higher equilibrium price

surplus of bottled water

shortage of bottled water

no one wants water

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The federal government supports farmers by setting a minimum price for milk. This is a:

price floor

tax

price ceiling

import ban

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If the minimum milk price is set above the market price, what is most likely?

less supply

milk surplus

milk shortage

no demand

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Which pair is matched correctly?

price ceiling → surplus

price floor → shortage

price floor → lower prices always

price ceiling → shortage

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A store has a legal maximum price for concert tickets. Many people want tickets, but tickets sell out quickly. This situation is most like a:

shortage from a price ceiling

surplus from a price floor

surplus from a price ceiling

shortage from a price floor

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Part C — Reading Passage 1 (Rent Control)

In City A, the government sets a maximum rent for apartments at $1{,}500$ dollars per month. Before the law, many apartments rented for $2{,}000$ dollars per month. After the law, more people try to rent apartments because the price is lower. Some landlords decide not to rent their apartments, and some delay repairs to save money. Many renters compete for a small number of available apartments.

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Part D — Reading Passage 2 (Minimum Wage)

A state raises the minimum wage to $17$ dollars per hour. Some small businesses used to pay $14$ dollars per hour for entry-level jobs. After the new law, some businesses hire fewer workers and ask current workers to do more tasks. More people apply for jobs because the pay is higher.

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Unit 3 Test - Price Ceilings & Price Floors

Unit 3 Test - Price Ceilings & Price Floors

A price ceiling is a law that sets a ______ price.

A price floor is a law that sets a ______ price.

A price ceiling is usually used to make goods ______.

A price floor is usually used to help ______.

If a price ceiling is set below the market price, the most likely result is a:

If a price floor is set above the market price, the most likely result is a:

Which word best matches shortage?

Which word best matches surplus?

A city limits rent increases and sets a legal maximum rent for apartments. This is a:

If rent control sets rent below the market rent, what is most likely?

A state sets a minimum wage of $$16$/hour. This is a:

If minimum wage is set above the market wage for some jobs, which could happen?

After a hurricane, a state sets a maximum price for bottled water to stop very high prices. This is a:

A possible result of a very low maximum price on bottled water is:

The federal government supports farmers by setting a minimum price for milk. This is a:

If the minimum milk price is set above the market price, what is most likely?

Which pair is matched correctly?

A store has a legal maximum price for concert tickets. Many people want tickets, but tickets sell out quickly. This situation is most like a:

A price ceiling is a law that sets a ______ price.

A price floor is a law that sets a ______ price.

A price ceiling is usually used to make goods ______.

A price floor is usually used to help ______.

If a price ceiling is set below the market price, the most likely result is a:

If a price floor is set above the market price, the most likely result is a:

Which word best matches shortage?

Which word best matches surplus?

A city limits rent increases and sets a legal maximum rent for apartments. This is a:

If rent control sets rent below the market rent, what is most likely?

A state sets a minimum wage of $$16$/hour. This is a:

If minimum wage is set above the market wage for some jobs, which could happen?

After a hurricane, a state sets a maximum price for bottled water to stop very high prices. This is a:

A possible result of a very low maximum price on bottled water is:

The federal government supports farmers by setting a minimum price for milk. This is a:

If the minimum milk price is set above the market price, what is most likely?

Which pair is matched correctly?

A store has a legal maximum price for concert tickets. Many people want tickets, but tickets sell out quickly. This situation is most like a:

The maximum rent ($$1{,}500$) is ______ the old market rent ($$2{,}000$).

After the law, what happens to quantity demanded of apartments?

After the law, what happens to quantity supplied of apartments?

The rent law is a:

The result described is most likely a:

Which is a likely sign of this shortage?

The new wage ($$17$) is ______ the old wage ($$14$).

Minimum wage is a:

After the wage increase, more people apply for jobs. This means labor quantity demanded by workers (people wanting jobs) likely:

The passage describes a possible:

Which is the best example of a price floor from real life?

Some businesses hire fewer workers. This means labor quantity demanded by businesses likely:

The maximum rent ($$1{,}500$) is ______ the old market rent ($$2{,}000$).

After the law, what happens to quantity demanded of apartments?

After the law, what happens to quantity supplied of apartments?

The rent law is a:

The result described is most likely a:

Which is a likely sign of this shortage?

The new wage ($$17$) is ______ the old wage ($$14$).

Minimum wage is a:

After the wage increase, more people apply for jobs. This means labor quantity demanded by workers (people wanting jobs) likely:

The passage describes a possible:

Which is the best example of a price floor from real life?

Some businesses hire fewer workers. This means labor quantity demanded by businesses likely: