Which one of the following statement best describes a price floor?
a. A price floor causes demand to change.
b. A price floor causes supply to change.
c. A price floor keeps a price from rising above a certain level.
d. A price floor keeps a price from falling below a certain level.
d. A price floor keeps a price from falling below a certain level.
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Consider a consumer with a choice set that emerges from an exogenous income I. Suppose that, as a result of changes in a consumer's economic circumstances, the budget line rotates outward, with the vertical intercept remaining unchanged but the horizontal intercept shifting to the right. Demonstrate, using the budget line equation, how this could have happened if the price of the good on the horizontal axis did not change?
What will be an ideal response?
A consumer will consume the combination of goods at the point of tangency between the budget line and the indifference curve
a. True b. False Indicate whether the statement is true or false
If net taxes paid by households increase:
A. public saving will decrease. B. transfer payments to households will decrease. C. private saving will decrease. D. private saving will increase.
In Likpe Mate, one of the Paramount seat villages within the newly created region, Oti Region, the sellers have agreed among themselves to sell food items in turns. Thus, if one-person cook waakye today, she has to wait for the next three days for others to also sell similar waakye before selling same waakye again. Due to such arrangement among the sellers in the village, consumers are complaining of high prices of food despite the village being a farming community. Should the people of Likpe Mate adopt ‘free competitive market’ as proclaimed by economists? Discuss