The Price Received by Sellers in a Market Will Decrease

question 60

Multiple Choice

The price received by sellers in a market will decrease if the government

• A)increases a binding price floor in that market.
• B)increases a binding price ceiling in that market.
• C)decreases a tax on the good sold in that market.
• D)None of the above is correct.

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Definitions:

Absolute Advantage

A situation where a country, entity, or individual can produce a good or service more efficiently (using fewer resources) than another.

Comparative Advantage

The ability of a country or individual to produce a good or service at a lower opportunity cost than another entity, leading to more efficient trade.

Tariffs

Taxes on imported goods and services, imposed to raise revenue and/or protect domestic industries from foreign competition.

Import Quotas

Government-imposed limits on the volume of specific goods that can be imported, aimed at protecting domestic producers by controlling market supply.