If the Equilibrium Price of Bread Is $2 and the Government

question 190

Multiple Choice

If the equilibrium price of bread is $2 and the government imposes a $1.50 price ceiling on the price of bread, then:

• A) more bread will be produced.
• B) there will be a shortage of bread.
• C) the demand for bread will decrease.
• D) producers will charge $0.50 for bread.
• E) $0.50 in tax revenue will be paid for each unit of bread.

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Definitions:

Expenditures Approach

A way of computing GDP by adding up the dollar value at current market prices of all final goods and services.

Income Approach

Method of finding GDP by adding all the incomes earned in the production of final goods and services.

Gross Domestic Product

The overall market or monetary value of all completed goods and services that have been created inside the confines of a nation during a defined timeframe.

Market Value

The current price at which an asset or service can be bought or sold in the marketplace.