Suppose You Live in a Community with No Price Controls

question 33

Multiple Choice

Suppose you live in a community with no price controls.What do you expect to happen if your town borders a community where there is a binding price floor on most products?

• A) Prices in the legal market in the community with a binding price floor would fall.
• B) There would be smaller surpluses in the community with a binding price floor.
• C) More consumers would purchase the product in the community without a price floor.
• D) The black market in the community with a binding price floor would be larger.
• E) Sales of the product in the community with a binding price floor would increase.

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Definitions:

Enslaved Africans

Describes Africans who were forcibly taken from their homeland and subjected to slavery, primarily in the Americas and Europe, from the 16th to the 19th centuries.

The Americas

A landmass comprising the continents of North America and South America, including associated islands and regions, known for its diverse cultures, languages, and histories.

Chesapeake Planters

Wealthy landowners in the Chesapeake Bay area during the colonial and early United States periods, known for cultivating tobacco as a cash crop.

African Slaves

Enslaved people brought from Africa to the Americas and other places through the transatlantic slave trade, used for labor from the 16th to the 19th century.