Suppose a Price Floor on Sparkling Wine Is Proposed by the Health

question 139

Multiple Choice

Suppose a price floor on sparkling wine is proposed by the Health Minister of the country of Vinyardia.What will be the likely effect on the market for sparkling wine in Vinyardia?

• A)Quantity demanded will decrease, quantity supplied will increase, and a surplus will result.
• B)Quantity demanded will increase, quantity supplied will decrease, and a surplus will result.
• C)Quantity demanded will decrease, quantity supplied will increase, and a shortage will result.
• D)Quantity demanded will increase, quantity supplied will decrease, and a shortage will result.

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Definitions:

Balance of Trade Deficit

An economic measure where a country's imports exceed its exports during a specific time period.

Imports and Exports

The practice of bringing goods and services into a country (imports) and sending goods and services out of a country (exports) to engage in international trade.

United States

A country located in North America comprised of 50 states, a federal district, five major self-governing territories, and various possessions, known for its diverse geography, culture, and economy.

Countertrade

A method of trade in which goods or services are exchanged for other goods or services rather than for money.