Author Question: Refer to the above figure. Other things being equal, when the government imposes a price floor at ... (Read 103 times)

scienceeasy · **on:** Jun 29, 2018

Refer to the above figure. Other things being equal, when the government imposes a price floor at P2, then we would expect

A) the quantity demanded is Q2.
B) a surplus will occur.
C) price to decline until an equilibrium is achieved at P0.
D) consumers to bid against each other for goods and force the price even higher.

Question 2

The reason the production possibilities curve is bowed outward (concave) is

A) the law of increasing additional cost.
B) that technology is constantly changing.
C) that the number of resources is increasing.
D) that the economy has more capital goods than entrepreneurial effort.