A price floor is:
a. the lowest price a producer will accept.
b. the lowest price a consumer will pay.
c. a minimum price set by the government above equilibrium price.
d. a maximum price set by the government above equilibrium price
e. usually set equal to equilibrium price.
c
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In a market economy, the decision regarding allocation of resources is made by
a. automatic forces of supply and demand. b. authorities in Washington, D.C. c. planners in state capitals. d. committees from a variety of economic interest groups. e. All of the above are correct.
Exhibit 2-18 Production possibilities curves In Exhibit 2-18, the production possibilities curves for a country are shown for the years Year X and Year Y. Suppose this country was located at point A in Year X and point B in Year Y. This economy:
A. is worse off in Year Y than in Year X. B. has stagnated production in this two year period. C. has less unemployment in Year Y than it did in Year X. D. has shown growth between these two years.