Question 8 Not yet answered Points out of 1 P Flag question When a price ceiling
ID: 1161974 • Letter: Q
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Question 8 Not yet answered Points out of 1 P Flag question When a price ceiling is in effect: Select one: O a. no mutually beneficial trades between buyers and sellers occur. O b. it is impossible to say if any, some, or all beneficial trades between buyers or sellers fail to occur. O C. all mutually beneficial trades between buyers and sellers occur. O d. some mutually beneficial trades between buyers and sellers do not occur. Question 9 Not yet answered Points out of 1 P Flag question If a tax is imposed on buyers and prices do not instantaneously adjust, a surplus is created. Select one: O True C False Question 10 Not yet answered Points out of 1 F Flag question A binding price floor leads to afp : Select one: O a. surplus. O b. quantity of zero units. O c. equilibrium quantity O d. shortage.Explanation / Answer
8. When a price ceiling is in effect, some mutually beneficial trades between buyers and sellers do not occur.
Answer - Option D
9. It is True that if a tax is imposed on buyers and prices do not instantaneously adjust then a surplus is created.
10. A binding price floor means price floor (legal minimum price) is set above equilibrium price. This will create a surplus as, at this binding price floor, supply exceeds demand.
Answer- option A
11. Increase in minimum wage causes higher unemployment, because minimum wage is a price floor and if it is set above the equilibrium wage rate, then there is already an unemployment that occurs (as at the minimum wage rate, labor supply exceeds labor demand). If the minimum wage is further increased, the gap between quantity of Labor supplied and quantities of labor demanded further increases, creating higher unemployment.
Answer- option D
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