To affect the market outcome, a price floor
A) must be set above the black market price.
B) must be set above the legal price.
C) must be set above the price ceiling.
D) must be set above the equilibrium price.
Answer: D
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Rational production decisions require an understanding of
a. trade-offs. b. opportunity costs. c. scarcity of resources. d. All of the above are correct.
A disadvantage associated with a minimum wage law to reduce poverty is that it
a. encourages illegitimate births because single women with children receive higher payments. b. rewards laziness because it provides payments to those with low incomes regardless of their work effort. c. focuses on children and the disabled while neglecting the working poor. d. may benefit the teenage children of families who are not poor.