Suppose Anthony Lives in a Community with No Price Controls

question 55

Multiple Choice

Suppose Anthony lives in a community with no price controls.What would he expect to happen if his town borders a community where there is a binding price floor on most products?

• A) Prices in the legal market in the community with a binding price floor would fall.
• B) There would be smaller surpluses in the community with a binding price floor.
• C) More consumers would purchase the product in the community without a price floor.
• D) The black market in the community with a binding price floor would be larger.
• E) Sales of the product in the community with a binding price floor would increase.

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Definitions:

Obscene Language

Language that offends the prevalent morality of the time, often relating to sexual matters in an explicit manner.

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A business that pursues payments of debts owed by individuals or businesses.

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A credit card company issues credit cards and is responsible for setting terms of use, collecting payments, and providing the credit for transactions.

Lost Card

A debit, credit, or any form of identification card that has been misplaced or stolen, potentially leading to unauthorized use if not reported.