If a Market Is Initially Operating Competitively and Then the Government

question 12

Multiple Choice

If a market is initially operating competitively and then the government imposes a price floor above the equilibrium price,

• A)there will be more resources will be devoted to the production of this product
• B)quantity demanded will rise
• C)producer surplus will fall in the short run
• D)imposition of the floor is probably a positive-sum game
• E)consumer surplus will fall

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Definitions:

Irrigation

The artificial application of water to land to assist in the growing of crops and vegetation.

Domestic Use

Refers to the consumption of resources, such as water or energy, within a household for daily activities such as drinking, cooking, heating, and bathing.

Groundwater Flow

The movement of groundwater through the Earth's subsurface, driven by gravity and differences in pressure.

Subsurface Material

Materials found beneath the Earth's surface, including rocks, minerals, and soil.