A government will create a surplus in a market when it sets a price

A. floor above the equilibrium price.
B. ceiling above the equilibrium price.
C. ceiling below the equilibrium price.
D. floor below the equilibrium price.


Answer: A

Economics

You might also like to view...

Oil is considered:

A. a renewable resource. B. a nonrenewable resource. C. physical capital. D. technology.

Economics

Fixing the insolvency problem caused by the Great Recession, the U.S. Federal Reserve as reluctant to purchase toxic assets from banks because:

a. It could cause an unwanted expansion of the e U.S. monetary base. b. Toxic security purchases had to be funded, and the Fed already had a major debt problem. c.It could cause an unwanted contraction of the U.S. monetary base. d. The Fed could be accused of nationalizing the U.S. financial system. e. All of the above.

Economics

Which of the following is not a condition for perfect competition to exist:

a) There are a small number of firms in the industry. b) All firms are producing the same product. c) It is easy to either enter or exit the industry. d) All of the above apply.

Economics

The long run is defined as the time period in which

A) the firm can vary only one input. B) the firm can make positive economic profits. C) all factors of production can be altered. D) the firm can alter its rate of production.

Economics