If a price floor is not binding, then
a. the equilibrium price is above the price floor.
b. the equilibrium price is below the price floor.
c. there will be a surplus in the market.
d. there will be a shortage in the market.
Answer: a. the equilibrium price is above the price floor.
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The difference between the cost of production on a piece of land less the cost of production on marginal land is called
a. usury. b. profit. c. rent. d. interest.
An increase in marginal tax rates will
A) increase the incentive of individuals to earn additional income. B) allow taxpayers to keep more of what they earn. C) reduce the share of additional earnings that individuals are permitted to keep. D) make tax deductible purchases more expensive.
An economy in which output has decreased and prices have increased would suggest that there has been a:
A. negative demand side shock. B. negative supply side shock. C. positive demand side shock. D. positive supply side shock.
As the interest rate falls, people hold ______ money instead of bonds because the opportunity cost of holding money has _____.
a) more; fallen b) less; fallen c) more; risen d) less; risen