What Are Market-Based Solutions

question 29

Multiple Choice

What are market-based solutions?

• A) reform options, such as tax credits and free-market investments, that substitute for government-sponsored social programs
• B) reforms applied to societal issues by creating a reliance on government-sponsored social programs
• C) reform options for economic issues that solve problems by passing social programs, such as those passed in the New Deal
• D) another name for a number of social programs passed in the Great Society

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Definitions:

Price Floor

A minimum price set by the government or other agency, below which a product cannot legally be sold.

Shortage

A situation where the demand for a product or service exceeds the supply available.

Surplus

A situation where the quantity of a good or service supplied exceeds the quantity demanded at a given price.

Equilibrium Quantity

The amount of products or services available and sought after at the equilibrium price, where the supply meets the demand.