Refer to Figure 4-7 which shows the market for watermelons. Suppose the government imposes a price floor of Pw. How will the price floor affect the quantity supplied, quantity demanded, and quantity exchanged?
What will be an ideal response?
The price floor will have no effect on the market outcome. An effective price floor must lie above the free-market equilibrium. Thus, in this case the market outcome will be determined by forces of demand and supply.
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Marginal utility can fall even as total utility from the consumption of a good is rising.
Answer the following statement true (T) or false (F)
The wartime demand for manufacturing goods directly impacted the economy in which of the following ways?
(a) Increased demand for factory workers (b) Increased demand for imported goods (c) Decreased demand for agricultural goods (d) All of the above
Each of the following is a legal barrier to entry into an industry except
A. government licensing. B. patents. C. government franchising. D. All of these choices are legal barriers.
Which of the following examples would most likely happen when interest rates are low?
a. Lily invests $20,000 in municipal bonds. b. Millie keeps a larger balance in her no-interest checking account. c. Finlay decides it is a bad time to purchase a car. d. Logan increases his deposits in an interest-earning savings account.