If the intended aim of the price floor set in the graph shown was a net increase in the well-being of producers, then positive analysis would have us consider:
A. the policy to be effective if area C is larger than area E.
B. the policy to be ineffective if area B is larger than area E.
C. the policy to be ineffective if area E + B is larger than A + C + D + F.
D. the policy to be effective if area E + B is larger than C + D + F.
Answer: A
You might also like to view...
The fact that it takes time for government to identify and recognize a problem is one reason for the occurrence of
A) implementation lags. B) outside lags. C) inside lags. D) structural lags.
Figure 10-5
In Figure 10-5, which graph best illustrates the situation of an economy near full employment that experiences an increase in autonomous consumer spending?
a.
(1)
b.
(2)
c.
(3)
d.
(4)
Fixed costs for a firm are analogous to:
A. the dirt that fills up the financial hole. B. digging a deeper financial hole by producing when prices are too low. C. the cost of the shovel needed to fill the financial hole. D. starting out in a hole that represents economic losses if the firm produces nothing.
In 2016, Ford Motor Company's sales were rising. These events were caused by
A) an economic recession. B) an economic expansion. C) an increase in advertising. D) improving quality of service.