A Price Floor That Is Set at $23 in the Market

question 66

Multiple Choice

A price floor that is set at $23 in the market shown in the graph is:

• A) binding and would cause a shortage.
• B) non-binding and would not affect the market.
• C) binding and would cause excess supply.
• D) non-binding and would not prevent the market from reaching equilibrium.

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Definitions:

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Arousal

A physiological and psychological state of being awake or reactive to stimuli.

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Cognitive capacities and energy available to an individual for executing tasks, processing information, and making decisions.

Kahneman

Daniel Kahneman is a psychologist known for his work on the psychology of judgment and decision-making, as well as behavioral economics, for which he was awarded the Nobel Prize in Economic Sciences.