If the Price Floor of a Market Is Raised,which of the Following

question 11

Multiple Choice

If the price floor of a market is raised,which of the following would happen?

• A)The consumer surplus would increase,the producer surplus would decrease and the dead weight loss would decrease
• B)The consumer surplus would decrease,the producer surplus would decrease and the dead weight loss would increase
• C)The consumer surplus,the producer surplus and the dead weight loss would all decrease
• D)The consumer surplus,the producer surplus and the dead weight loss would all increase
• E)The consumer surplus would decrease,the producer surplus would increase and the dead weight loss would increase

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Definitions:

Zero-Sum Game

A situation in economic theory or game theory where one participant's gain or loss is exactly balanced by the losses or gains of the other participants.

Constant-Sum Game

A situation in game theory in which the sum of the participants' gains and losses is constant, meaning what one gains, another loses.

Resistance Point

In negotiations, the least favorable point at which one will accept a deal, beyond which the party would prefer to walk away from the negotiation.

Labor Negotiations

The process by which employers and unions discuss and agree on the terms of employment, including wages, working hours, and working conditions.