One of the Problems Created by Price Floors Set Above

question 28

Multiple Choice

One of the problems created by price floors set above the equilibrium is:

• A) the effect on firm profitability.
• B) firms don't have incentives to reduce costs.
• C) the creation of surplus.
• D) how to cope with the shortages.

Understand the economic and ethical arguments surrounding the rent of land.

Discern the effect of external regulations on price mechanisms.

Explain the influence of historical and philosophical perspectives on economic concepts like usury.

Understand the principles of interest rates and the effect of usury laws on the economy.

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Definitions:

Castration Anxiety

A concept in psychoanalytic theory referring to a child's fear of losing their genitalia, believed to play a role in the development of certain complexes and behaviors.

Behaviourism

A psychological approach to understanding abnormal behaviour devised by John B. Watson (1858–1935), which declared that psychology must be restricted to the study of observable features, that is, the behaviour of organisms. Watson considered abnormal functioning to be learned and so believed it could be unlearned. His model for learning was derived from Ivan Pavlov’s (1849–1936) studies of classical conditioning.

Classical Conditioning

A learning process where a neutral stimulus becomes associated with a meaningful stimulus and acquires the capacity to elicit similar responses.

Watson

John B. Watson, an American psychologist who established the psychological school of behaviorism.