TABLE 4-4 -Refer to Table 4-4. If the Government Intervenes in the Government

question 119

Multiple Choice

TABLE 4-4

-Refer to Table 4-4. If the government intervenes in the market for milk and sets a price floor of $1.20, what will be the result?

• A) There will be a surplus of 500 litres of milk.
• B) Some consumers will pay $1.00 per litre of milk.
• C) Some consumers will not be able to buy milk who wish to purchase it at that price.
• D) There will be a shortage of 500 litres of milk.

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Definitions:

Marginal Revenue

The boost in revenue achieved by selling one more unit of a good or service.

Demand Curve

A graph demonstrating the relationship between the price of a good or service and the quantity demanded for it at those prices, typically showing a downward slope from left to right.

Demand Schedule

A table that shows the quantity of a good or service that consumers are willing and able to purchase at different price levels.

Marginal Cost

The elevation in full costs that come from generating an additional unit of a good or service.