A price floor is:
a. the lowest legal price that can be paid in markets for goods and services.
b. the highest legal price that can be charged in markets for goods and services.
c. decided by the sellers of a good or service
d. decided by the consumers of a good or service.
a
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The United States can produce 1,000 shoes if it specializes in shoe production. Alternatively, it can produce 500 shirts. Taiwan can produce 500 shoes or 200 shirts. Explain which country will specialize in shoe production and which in shirt production. What are the possible terms of trade?
What will be an ideal response?
Ceteris paribus, if the French decide they want to drink more Chinese-grown tea, this causes the ________ Chinese currency to ________.
A. supply of; decrease B. demand for; increase C. demand for; decrease D. supply of; increase
If a union negotiated a wage above the market equilibrium wage, we would find
A) a surplus of laborers at the negotiated wage. B) a shortage of laborers at the negotiated wage. C) higher efficiency of labor at the negotiated wage. D) lower worker productivity at the negotiated wage.
The free-rider problem occurs because
A) people who pay for information use it freely. B) people who do not pay for information use it. C) information can never be sold at any price. D) it is never profitable to produce information.