ECS 1501 STUDY GUIDE . QUESTIONS AND CORRECT ANSWERS. 2025
QUESTION: price ceiling - ANSWER-A legal maximum on the price at which a good can be sold
QUESTION: price floor - ANSWER-A legal minimum on the price at which a good can be sold
QUESTION: Price ceiling impacts - ANSWER-A persistent shortage (excess demand) develops. "Black
Market" develops. Opportunities for corruption and bribery are created.
QUESTION: Price flooring impacts - ANSWER-A persistent surplus develops. Consumers have to pay
artificially high prices. Inefficient producers are protected and manage to survive. The disposal of the
market surpluses usually entails further costs to tax payers and welfare losses to society.
QUESTION: price elasticity of demand - ANSWER-the percentage change in quantity demanded divided
by the corresponding percentage change in its price
QUESTION:
QUESTION: price ceiling - ANSWER-A legal maximum on the price at which a good can be sold
QUESTION: price floor - ANSWER-A legal minimum on the price at which a good can be sold
QUESTION: Price ceiling impacts - ANSWER-A persistent shortage (excess demand) develops. "Black
Market" develops. Opportunities for corruption and bribery are created.
QUESTION: Price flooring impacts - ANSWER-A persistent surplus develops. Consumers have to pay
artificially high prices. Inefficient producers are protected and manage to survive. The disposal of the
market surpluses usually entails further costs to tax payers and welfare losses to society.
QUESTION: price elasticity of demand - ANSWER-the percentage change in quantity demanded divided
by the corresponding percentage change in its price
QUESTION:
