A price floor represents
A) a maximum price that can be legally charged for a product or service.
B) a minimum price that can be legally charged for a good or service.
C) a lottery imposed upon producers by the government.
D) a first come, first served mechanism for controlling prices.
B
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Assume the price of product A increases from $1 to $1.50, while the price of competing product B increases from $1.50 to $2.00
Based on the information, what we can say about the absolute and relative price differences between the two products and the relative attractiveness of the two products to consumers.
A cake is to be shared by two people. Both desire the largest piece possible. One of the two will cut the cake. Under which of the following situations will the cutter adopt a Rawlsian social welfare function?
A) The person cutting the cake chooses the first piece. B) The person not cutting the cake chooses the first piece. C) The two individuals will bid for the right to cut the cake and choose first. D) The two individuals will toss a coin for the right to cut the cake and choose first.