When the government establishes a minimum price for an agricultural product above the equilibrium price, the government is creating a(n)
A) price ceiling.
B) elevated price.
C) price floor.
D) surplus price.
C
You might also like to view...
If workers and firms have rational expectations, they understand that ________ monetary policy will raise the inflation rate, so actual inflation ________ expected inflation
A) contractionary; will be equal to B) contractionary; will be less than C) expansionary; will be greater than D) expansionary; will be equal to E) expansionary; will be less than
A decision made by a rational person
A) is intended to make the person worse off. B) would always make the person wealthier. C) is identical to a decision that would be made by any other person facing the same choices. D) is intended to make the person better off.
How does a perfect market influence output?
(A) Different firms each strive to make more goods and capture more of the market. (B) Different firms make different amounts of goods, but some make a profit and others do not. (C) Each firm makes its output as large as possible even though some goods are not sold. (D) Each firm adjusts its output so that its costs, including profit, are covered.
Mechanism design is used to
A. give individuals the incentive to reveal the truth about themselves. B. align the interests of two parties in a transaction. C. correct inefficiencies associated with asymmetric information. D. All of the above are correct.