1. The most likely impact of an effective price floor is: A. shortage will devel
ID: 1190849 • Letter: 1
Question
1. The most likely impact of an effective price floor is:
A. shortage will develope
B. the supply curve will shift to the right.
C. the demand curve will shift to the left.
2. Households are on the:
A. supply side of factor markets and the demand side of goods markets.
B. demand side of both factor markets and goods markets.
C. demand side of factor markets and the supply side of goods markets.
D. supply side of both factor markets and goods markets.
3. In the goods market:
D. government produces goods and services and supplies them to households and business.
4. In the factor market
D. government produces goods and services and supplies them to households and business.
5. Businesses are on the:
D. demand side of both factor markets and goods markets.
6. Businesses do all of the following except:
D. pay taxes to the government.
7. Households do all of the following except:
B. receive income that is redistributed by the government.
D. demand labor services from businesses in the factor market.
8. T/F Billy Preston’s song “Will It Go Round in Circles” captures the essence of the circular flow diagram or model.
1. The most likely impact of an effective price floor is:
A. shortage will develope
B. the supply curve will shift to the right.
C. the demand curve will shift to the left.
2. Households are on the:
A. supply side of factor markets and the demand side of goods markets.
B. demand side of both factor markets and goods markets.
C. demand side of factor markets and the supply side of goods markets.
D. supply side of both factor markets and goods markets.
3. In the goods market:
A. households supply goods to business and are paid by businesses for doing so. B. households supply factors of production to business and are paid by business for doing so. C. business produces goods and services and sells them to households and government.D. government produces goods and services and supplies them to households and business.
4. In the factor market
A. business produces goods and services and sells them to households and government. B. households supply factors of production to business and are paid by government for doing so. C. households supply factors of production to business and are paid by business for doing so.D. government produces goods and services and supplies them to households and business.
5. Businesses are on the:
A. demand side of factor markets and the supply side of goods markets. B. supply side of factor markets and the demand side of goods markets. C. supply side of both factor markets and goods markets.D. demand side of both factor markets and goods markets.
6. Businesses do all of the following except:
A. demand goods and services from households in the goods market. B. demand labor services from households in the factor market. C. supply goods and services to the government in the goods market.D. pay taxes to the government.
7. Households do all of the following except:
A. demand goods and services from businesses in the goods market.B. receive income that is redistributed by the government.
C. supply labor services to the government in the factor market.D. demand labor services from businesses in the factor market.
8. T/F Billy Preston’s song “Will It Go Round in Circles” captures the essence of the circular flow diagram or model.
Explanation / Answer
When a price floor is set. First of all, the price floor has raised the price above what it was at equilibrium, so the demanders (consumers) aren't willing to buy as much quantity. The demanders will purchase the quantity where the quantity demanded is equal to the price floor, or where the demand curve intersects the price floor line. On the other hand, since the price is higher than what it would be at equilibrium, the suppliers (producers) are willing to supply more than the equilibrium quantity. So there is less quantity demanded (consumed) than quantity supplied (produced). This is called a surplus.
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