Use the Following Figure to Answer the Questions That Follow

question 152

Multiple Choice

Use the following figure to answer the questions that follow.

-If the government imposes a price floor on wheat at $5 and agrees to purchase any surpluses,how much will the government be forced to spend?

• A) $15 million
• B) $3 million
• C) $10 million
• D) $25 million
• E) nothing, because there would be no surplus

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Definitions:

Bilateral Contract

An agreement involving two parties where each promises to perform an act in exchange for the other's act.

Unilateral Contract

A legal agreement in which only one party makes a promise or undertakes a performance obligation in exchange for an act by the other party.

Breach of Contract

An act of breaking the terms set out in a contract, which can result in legal consequences for the party that fails to honor its commitments.

True Value

The genuine or actual worth of an item, service, or financial instrument as determined by underlying characteristics and market conditions.