Suppose the equilibrium price of a gallon of milk is $4. If the government imposes a price floor of $5 per gallon of milk, the
A) quantity supplied of milk falls short of the quantity demanded.
B) quantity supplied of milk exceeds the quantity demanded.
C) supply increases.
D) demand decreases.
E) price of milk remains $4 per gallon.
B
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A major factor in determining the rational expectation of inflation is
A) the size of the budget deficit. B) forecasts of the Fed's monetary policy. C) forecasts of fiscal policy. D) the previous month's unemployment rate. E) the recent past behavior of the stock market.
In the above figure, what quantity will a single-price monopolist produce?
A) Q1 B) Q2 C) Q3 D) Q4
Which of the following is a deficit item in the U.S. current account?
A) Toyota builds a new plant in California. B) Many U.S. residents who previously had not traveled abroad decide to make Mexico a tourist destination. C) A Saudi Arabian prince builds six new homes in California. D) Sony buys a new film studio in Florida.
Discuss why the Fed rarely changes the reserve requirements