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Question
What will happen in a market where a binding price floor is removed?
a. The products sold will become scarcer.
b. There will be upward pressure on the prices.
c. There will be downward pressure on the prices.
d. The price or quantity of the product sold in the legal market will not change.
e. There will be increased pressure to buy and sell the good on the black market.
Answer
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The economic entity most likely to engage in price gouging is
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What will an individual do differently as a buyer in the black market in the long run?
a. He or she will substitute away from the product.
b. He or she will substitute toward the product.
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Q:
What is the long-run consequence of a price ceiling law?
a. A surplus will continue to exist and will grow larger over time.
b. A surplus will continue to exist and will grow smaller over time.
c. A shortage will continue to exist and will grow larger over time.
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Q:
Suppose Solomon lives in a community with no price controls. What do you expect will happen if his town borders a community where there is a binding price ceiling on most products?
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