Assume that your state government has placed a price ceiling of $.20 per kilowatt hour on electricity. The equilibrium price per kilowatt hour for electricity is $.25. The government's action will result in

Question 3 options:

	an increase in producer surplus.
	a deadweight loss.
	a surplus of electricity in the electricity market.
	an increase in the price of electricity to $.25 per kilowatt hour.

Question 4 (1 point)

A Price Floor set below an equilibrium price is:

Question 4 options:

	Ineffective, and increased search activity will occur
	Effective, and will cause a shortage
	Ineffective, nothing will change
	Effective, and will cause a surplus

Question 5 (1 point)

Suppose the equilibrium wage is $10 per hour. A minimum wage is a ________ and affects employment if it is set at ________.

Question 5 options:

	price floor; $12 per hour
	price floor; $8 per hour
	price ceiling; $12 per hour
	price ceiling; $10 per hour

Answer rating: 100% (QA)

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