The Persistent Unwanted Surplus That Results from a Binding Price

question 97

Multiple Choice

The persistent unwanted surplus that results from a binding price floor causes inefficiencies that do NOT include:

• A)inefficiently low quality.
• B)inefficient allocation of sales among sellers.
• C)wasted resources.
• D)the temptation to break the law by selling below the legal price.

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Definitions:

Cheque

A bill of exchange that is drawn on a banking institution, and payable on demand.

Drawer

In the context of banking and finance, a drawer is the person who writes or issues a check, directing a bank to pay the stated amount from the drawer's account.

Payee

The individual or entity to whom money is payable or is meant to be paid, typically named in financial documents like checks or promissory notes.

Certification

Of a cheque, an understanding by a bank to pay the amount of a cheque on presentation.