A price floor policy establishes a minimum price for a market, and the policy is said to be binding if the market equilibrium price is less than the floor price. What impact does a binding price floor have on the market outcome?
A) Excess supply
B) Excess demand
C) Shortage
D) No impact, and the market price and quantity equal their equilibrium values
A
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In his second term, President George W. Bush revived his earlier proposal to
A. eliminate entirely the Social Security taxes paid by employers. B. place some Social Security taxes of young workers in private accounts under their control. C. place all Social Security taxes of young workers in private accounts under their control. D. reduce by one-half the Social Security tax rates on employers.
The incidence of a tax refers to
A) the division of the burden of a tax between buyers and sellers. B) the deadweight loss that a tax generates. C) the inefficiency of a tax. D) the revenue collected by government because of a tax. E) the division of the burden of a tax between the public and the government.
The above figure shows the market for pizza. Which figure shows the effect of a decrease in the price of a hamburger, which for consumers is a substitute for pizza?
A) Figure A B) Figure B C) Figure D D) Figures B and C
Average total costs are
A) total costs divided by total output. B) total output divided by total costs. C) the change in total costs divided by the change in output. D) the change in output divided by the change in total costs.