Lesson 6

Question 1

Direction of Causation

Answer 1

The causal relationship between one event and another

Question 2

Price Control Law

Answer 2

A law that mandates what price buyers and sellers must trade at

Question 3

Effective Price Control

Answer 3

A price control law that keeps the price above or below the market-clearing price

Question 4

Maximum Price Control Law (Price Ceiling)

Answer 4

A law that prohibits people from trading at a price above a legal maximum

Question 5

Minimum Price Control Law (Price Floor)

Answer 5

A law that prohibits people from trading at a price below a legal minimum

Question 6

Rent Control Law

Answer 6

A maximum price control on rental housing

Question 7

Rationing laws

Answer 7

Laws that restrict people’s consumption of certain goods

Question 8

Price Gouging

Answer 8

Charging a price that is “too high.”

Question 9

Price Gouging Laws

Answer 9

Maximum price control laws imposed on
necessities during an emergency, typically set at the
pre-emergency price.

Question 10

Minimum Wage Law

Answer 10

A minimum price control on workers’ wages