Topic Questions (EASY): Methods of Micro Intervention

What terms complete the following statement?

A ...1... price set lower than the market equilibrium will result in a ...2... of the product, and a ...3... price set above the market equilibrium will be associated with a ...4... of the product.

A

B

C

D

In a market with a maximum price, if the price ceiling is lifted, what will be the method of allocation?

Allocation by a queuing system.

Allocation by government rationing.

Allocation by seller’s preference.

Allocation by the price system.

Which of the following pairs of government actions aim to directly benefit suppliers?

government provision of consumer goods and maximum price laws

maximum price laws and price stabilisation policies

price stabilization policies and indirect taxes

production subsidies and minimum price laws

Which of the following products is most likely to be exclusively provided by the government?

National defense

National health insurance

National museums

National theaters

If a government provides a subsidy to a producer of a product, what is the expected outcome?

A shift to the right in the supply curve and a rise in equilibrium price

A shift to the right in the demand curve and a fall in equilibrium price

A shift to the left in the supply curve and a rise in equilibrium quantity

A shift to the right in the supply curve and a rise in equilibrium quantity

How can a ‘sugar tax’ on high sugar content soft drinks help to reduce the number of overweight people?

Consumers switch to cheaper high sugar content soft drink brands.

Consumers switch to other high sugar substitute goods.

The price elasticity of demand for soft drinks is inelastic.

The tax revenue is used to educate consumers about the harm of consuming soft drinks.