Price Ceilings and Price Floors · seed 1 · A4, ink-friendly. The answer key prints on its own page for grown-ups.

Caps below, floors above, and the gaps they open

Civics & Economics · Economics · ages 15-16
Name ______________________   Date ____________

  1. A minimum wage is set above the market wage. What appears?

    • A shortage of workers
    • Instant equilibrium
    • A surplus of labour, with seekers outnumbering jobs

  2. A city caps rents below the market price. What appears?

    • A shortage, with more hunters than flats
    • A surplus, with empty flats piling up
    • Equilibrium, with no pressure to move

  3. A ceiling set above the market price changes nothing.

    Circle one:   True   False

  4. Why is the shortage wider when demand and supply are elastic?

    • Elastic buyers and sellers stretch further from equilibrium
    • Elastic markets ignore prices entirely
    • Elasticity bans all price controls

  5. Under rent control, who loses without appearing in the debate?

    • Landlords who earn less
    • Tenants who keep cheap flats
    • Hunters who never find a flat at all

  6. At a price above equilibrium, with no control in place, what do you see?

    • Queues of buyers
    • Unsold goods piling as surplus
    • A market with no pressure at all

  7. Two cities freeze rents, but city B has elastic supply. What follows?

    • Both cities see identical shortages
    • City B sees the larger shortage as landlords stretch further
    • City B sees no shortage at all

  8. A mayor caps rents and claims every tenant is helped. What is the flaw?

    • Keeping tenants gain, but hunters shut out and upkeep falls
    • No tenant keeps any flat
    • Landlords earn more than before
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Answer key

For grown-ups. Fold this page away before handing over the rest.

Caps below, floors above, and the gaps they open W1-mt_ycfT-gkRVy-s1

  1. A surplus of labour, with seekers outnumbering jobs · Above equilibrium, quantity supplied beats quantity demanded: a surplus.
  2. A shortage, with more hunters than flats · Below equilibrium, quantity demanded beats quantity supplied: a shortage.
  3. True · It never bites, since the market already sits below the cap.
  4. Elastic buyers and sellers stretch further from equilibrium · Flexible sides move further, so the gap between them grows.
  5. Hunters who never find a flat at all · They pay the shortage yet never feature as tenants in any argument.
  6. Unsold goods piling as surplus · Above the crossing, sellers offer more than buyers take.
  7. City B sees the larger shortage as landlords stretch further · Elastic supply stretches further from equilibrium, widening the gap.
  8. Keeping tenants gain, but hunters shut out and upkeep falls · Winners, losers and the vanished all belong in the verdict.
Worksheet · LightMySky