When Governments Intervene in Markets-End of Chapter Problem a. Price ceilings create if they are set b. Which of the following are price ceilings? the minimum wage rent control price controls on prescription drugs an agricultural price support the equilibrium price.

1. What is a good or service that you think should have a price ceiling (maximum price) 2. What is a good or service that you think should have a price floor (minimum price)

Empirical evidence suggests that increases in the minimum wage do not result in reductions in employment among workers aged 25-54, but cause reduced employment for teenagers. This would suggest: A. the minimum wage is lower than the market-clearing wage for workers aged 25-54 B. the higher minimum wage causes a shift in supply for older age groups C. the minimum wage is lower than the market-clearing wage for teenagers

If the government imposes a price ceiling at $14, and the equilibrium price is at $10 in this market, the result would be a. A shortage b. A surplus c. A new equilibrium price d. Neither a surplus or a shortage