1. When California attempted to \" deregulate\" it\'s electricity market, a pric

Question

1. When California attempted to " deregulate" it's electricity market, a price "cap" was placed on the retail price for electricity. Due to increse in demand in the late 1990's/ early 2000's the cap became a

a) price ceiling, creating an excess supply(surplus) of electricity

b) price floor, creating an excess demand (shortage) for elcetricity

c) price floor, creating an excess supply (surplus) of electricity

d) price ceiling, creating an excess demand(shortage) for electricity

2. One way of thinking of the correct of opportunity cost is, that it is

a) an incremental change in an economic variable

b) the amount of labour that must be used to produce one unity of any product

c) the monetary price of any factor of production

d) what you dont have cause you have what you do have

Explanation / Answer

Question 1.

Ans. B. Price floor, creating an excess demand (shortage) for electicity.

Question 2.

Ans. D. What you dont have cause you have what you do have

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