5 Written Questions

1. ___ attempts to manipulate the economy often have short-term and long-term unintended negative consequences.
2. Poland implemented price controls on milk in the 1990s. As a result, the milk on the shelves sold out but farmers stopped producing milk because it was ___.
3. U.S. companies may be at an unfair disadvantage because U.S. minimum wage laws force ___ to pay higher wages, thus providing an incentive to relocate to Mexico.
4. The government maintains a "___" (French for "hands-off") approach to the economy.
5. ___ set a maximum price for a good or service.

5 Matching Questions

1. value
2. wages
3. unskilled
4. trade
5. Germany

1. a Louisiana's cost for NAFTA is the loss of jobs to Mexico because of lower ___ in Mexico.
2. b Even high school students often earn more than the minimum wage because of the demand for ___ labor.
3. c Price controls ordered by the American military in ___ after World War II resulted in a large black market (or underground) economy.
4. d Supply and demand always win out over price controls in the long term because supply and demand reflect the true ___ of goods and services
5. e The government negotiates ___ agreements with foreign nations.

5 Multiple Choice Questions

1. Price controls may seem helpful to ___, but cause more harm than good.
   1. Government
   2. consumers
   3. treaties
   4. employers
2. The President's representatives negotiate ___ and the Senate confirms them in keeping with the Constitution.
   1. wages
   2. treaties
   3. trade
   4. Mexico
3. Price controls attempt to avoid the law of ___.
   1. supply and demand
   2. Government
   3. unskilled
   4. employers
4. ___ laws are a form of price control -- they set a minimum price for an hour of labor.
   1. wages
   2. consumers
   3. Minimum wage
   4. shortages
5. NAFTA increases ___ in the market by lowering barriers to trade.
   1. treaties
   2. Mexico
   3. automation
   4. competition

5 True/False Questions

1. shortages → Price controls result in...

   True        False

2. labor → The minimum wage prevents teens from getting jobs as jobs are eliminated when the minimum wage is more than teen ___ is worth.

   True        False

3. black markets → A true ___ economy is liberated from any government interference in the economy.

   True        False

4. market → Louisiana's cost for NAFTA is the loss of jobs to Mexico because of lower ___ in Mexico.

   True        False

5. mixed market-based → A true ___ economy is liberated from any government interference in the economy.

   True        False