A Binding Price Floor Causes

question 98

Multiple Choice

A binding price floor causes:

• A)a shortage in the market.
• B)a surplus in the market.
• C)an efficient use of resources.
• D)equilibrium.

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Definitions:

Perfect Substitutes

Two goods that could be used in place of one another with no loss of utility to the consumer.

Utility Function

A mathematical representation of how different combinations of goods or services produce varying levels of satisfaction or utility to a consumer.

Commodities

Fundamental commodities traded in business that can be exchanged with others of alike kind.

Units Of Good

Measurement quantities used to quantify the amount, number, or level of goods.