Suppose a Price Floor Is Set on Cane Sugar That

question 57

Multiple Choice

Suppose a price floor is set on cane sugar that is approximately three times the equilibrium price. One of the effects is a(n)

• A) drop in the quantity of sugar consumed.
• B) increase in the efficiency of the market.
• C) shortage of sugar.
• D) shift by food manufacturers from the use of corn syrup to cane sugar.

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Definitions:

Liability Account

An accounting record that captures the amount of money a firm owes to outsiders, including debts and obligations.

Credit Account Balance

A credit account balance refers to the total amount of credit available in a person's or organization's account, after considering all debits and credits.

Adjusting Entries

Documentation in financial records at the termination of an accounting period to allocate gains and expenses to the correct timeframe.

Trial Balance

A financial spreadsheet where all ledger balances are gathered into columns for debits and credits, ensuring both totals match.