Suppose the Equilibrium Price in a Market Is $5, and the Government

question 34

Multiple Choice

Suppose the equilibrium price in a market is $5, and the government imposes a $4.50 price floor on the market. This will:

• A)create excess supply.
• B)create excess demand.
• C)shift the demand curve to the right.
• D)have no effect on the market.

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Definitions:

Bargaining Representative

A person or entity designated to negotiate on behalf of a group during collective bargaining processes.

Good Faith

The assumption that parties in a transaction will act honestly and not seek to deceive or defraud each other.

Primary Boycott

A boycott against an employer with whom the union is directly engaged in a labor dispute.

Labor Dispute

A disagreement between workers and their employer, often over wages and working conditions.