D089 - Module 4 Practice

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Western Governors University *

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D089

Subject

Economics

Date

Jan 9, 2024

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htm

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4

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D089 - Module 4 Practice D089 Course Instructors have created this resource to help develop your knowledge of the concepts in Module 4. We recommend reading the material in your Acrobatiq text and watching the videos before working on the questions. Please note that these questions do not come from the actual assessment. Course Instructors are not privy to information on the assessment. If you have any questions, please feel free to reach out to us at economics@wgu.edu . Points: 9/12 Correct 1/1 Points 1 Laws enacted by government to regulate prices are called price controls. Which of the following statements correspond to a price ceiling ? (choose 2 answers)Multiple choice. Sets a legal maximum price in the market Creates a shortage Creates a surplus Sets a legal minimum price in the market Correct answers: Sets a legal maximum price in the market,Creates a shortage Correct 1/1 Points 2 Laws enacted by government to regulate prices are called price controls. Which of the following statements correspond to a price floor ? (choose 2 answers)Multiple choice. Sets a legal minimum price in the market Sets a legal maximum price in the market Creates a surplus Creates a shortage Correct answers: Sets a legal minimum price in the market,Creates a surplus Incorrect 0/1 Points 3 The policy where a price ceiling is used to limit the rent landlords can charge is called "Rent Control". What happens in the housing market when a city enacts a rent control policy?Single
choice. The quantity of housing supplied decreases. Equilibrium price in the housing market decreases. Feedback: The price ceiling limits the rent landlords can charge, but does not change underlying conditions in the housing market. As the price of housing decreases, producers reduce the quantity of housing supplied. Demand for housing increases. A surplus is created in the housing market. Your answer to question 3 is wrong. Correct answers: The quantity of housing supplied decreases. Incorrect 0/1 Points 4 The table below provides data on the cell phone market. Suppose the government set a price ceiling of $150 for a cell phone. What would happen in the market for cell phones?Single choice. There would be a shortage and the price would rise to bring the market to equilibrium. Feedback: The $150 price ceiling creates a shortage. 650 phones are demanded, but only 500 phones are supplied. Ordinarily the market price would increase bringing the market back to equilibrium. Because the price floor does not allow the price to adjust, the market remains inefficient. There would be a surplus and the price would fall to bring the market to equilibrium. There would be a surplus and the market would be inefficient. There would be a shortage and the market would be inefficient. Your answer to question 4 is wrong. Correct answers: There would be a shortage and the market would be inefficient. Correct 1/1 Points 5 Which of the following describes a market where prices are volatile (have more extreme fluctuations) because there are few buyers and sellers in the market.Single choice. Adverse Selection Moral Hazard Thin Market Asymmetric Information Correct answers: Thin Market Correct 1/1 Points 6 Which of the following describes a market where individuals and firms are more likely to engage in risky behavior when they are protected from facing the costs of that behavior?Single choice. Moral Hazard Thin Market Adverse Selection
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