When an Effective Production Quota Is Applied in the Market

question 67

Multiple Choice

When an effective production quota is applied in the market for wheat,the quantity produced ________ and the price ________.The marginal social benefit ________ the marginal social cost.

• A)increases;rises;exceeds
• B)decreases;falls;is less than
• C)decreases;rises;exceeds
• D)increases;falls;is less than
• E)decreases;rises;is less than

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Definitions:

Private Investment

Private Investment encompasses the expenditures on capital assets by private businesses or individuals, excluding government spending.

Business Optimism

A positive outlook or sentiment held by businesses about the future economic conditions, often leading to increased investment and growth plans.

Price Floor

A minimum price set by regulation or agreement, preventing prices of goods or services from dropping below this threshold, aimed at supporting producers.

Equilibrium Price

The price at which the quantity demanded by consumers equals the quantity supplied by producers, resulting in market balance.