Suppose the Government Imposes a Price Support That Is Above

question 142

Multiple Choice

Suppose the government imposes a price support that is above the equilibrium price.As a result,

• A) total revenue increases.
• B) consumer surplus increases.
• C) the marginal cost of the last unit produced decreases.
• D) the government has effectively imposed a price ceiling.
• E) the subsidy the government pays decreases.

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Definitions:

Labour Efficiency

The measure of the output generated by employees in relation to the time and resources used, indicating the productivity of labor.

Overtime Hours

Hours worked by employees that exceed the standard working hours, often compensated at a higher pay rate.

Statistical Control Chart

A tool used in statistical quality control to monitor, control, and improve the process quality by plotting data points over time and determining whether they fall within a specified control limit.

Labour Efficiency Variance

The deviation in actual labor usage compared to what was expected or budgeted, impacting the cost-efficiency and profitability of production.