What is a price ceiling? A government mandated price in which the price is set below the equilibrium price A government mandated price in which the price is set above the equilibrium price A tool used by the federal government to create surpluses in the market A tool used by the federal government to move the market towards equilibrium Question 2 1 Point Based on the law of supply, when prices rise, quantity ___________________. Falls Remains constant Rises Will shift upwards Will shift downwards Question 3 1 Point Which factor would cause a negative external shock to our domestic economy? An increase in subsidized housing An increase in demand for electric vehicles Climate change Public policies Question 4 1 Point How do price floors create negative externalities? Price floors decrease unemployment Price floors increase unemployment Price floors lead to higher levels of GDP Price floors allow for the supply and demand of laborers to equal zero Question 5 1 Point The law of demand states: A positive relationship between price and quantity. An inverse relationship between price and demand. A positive relationship between price and demand. An inverse relationship between price and quantity. The assumption that there is no relationship