In Order for a Price Floor to Be Binding, It

question 71

Multiple Choice

In order for a price floor to be binding, it must be set _______ the equilibrium price, and it will likely cause _______.

• A) above; a shortage
• B) below; a shortage
• C) above; excess supply
• D) below; excess supply

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Definitions:

Public Transportation

A system of vehicles such as buses and trains that operate at regular times on fixed routes and are used by the public.

In-state Students

Students enrolled in a public university or college within the same state in which they are residents, often eligible for lower tuition rates.

State Universities

Public universities that are primarily funded by a state government, offering higher education services to residents often at a reduced cost.

High-interest Loans

Loans that carry significantly higher interest rates than typical loans, often due to increased credit risk.