Price Floor
Trending Questions
Prices are the signals that guide the allocation of society’s resources.
True
False
A Price floor is a minimum price allowed by law.
True
False
Price floors works exactly how price ceilings work, and hence, have four parallel effects: Surpluses, Lost gains from trade (deadweight loss), Wasteful increases in quality and again misallocation of resources
False
True
An example of price floors is the minimum wage law in the labour market, where government, in order to protect the suppliers and interests of laborers, mandates a wage floor or minimum wage.
True
False
- excess demand
- excess supply
- shortage
- tax
- price ceiling
- price floor
If the price of a good decreases while the quantity of the good exchanged on markets decreases, then the most likely explanation is that there has been
an increase in demand.
a decrease in demand
a decrease in supply
an increase in supply
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