If an Agricultural Price Support Keeps a Price Above the Equilibrium

question 83

Multiple Choice

If an agricultural price support keeps a price above the equilibrium market price,

• A)Shortages of agricultural products will result.
• B)More resources will be devoted to agriculture than are optimal.
• C)There will be redistribution of income from the government to consumers.
• D)There will be positive market feedback leading to even higher prices.

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Definitions:

Current Ratio

A liquidity ratio that measures a company's capacity to pay off its short-term liabilities with its short-term assets.

Total Assets

The sum of all assets owned by a company, including both current and non-current assets, as recorded on the balance sheet.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, essentially representing the owners’ equity.

Note Receivable

A written promise for the amounts to be received, typically recording a receivable where the individual or entity promises to pay a sum of money at a future date.