When a Binding Price Floor Is Imposed on a Market

question 35

Multiple Choice

When a binding price floor is imposed on a market to benefit sellers,

• A)every seller in the market benefits.
• B)all buyers and sellers benefit.
• C)every seller who wants to sell the good will be able to do so,but only if he appeals to the personal biases of the buyers.
• D)some sellers will not be able to sell any amount of the good.

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Definitions:

Capital Goods

Long-lasting goods that are used in the production of other goods or services and are not consumed in the process.

Economic Growth

A growth in the economy's output of goods and services over time, typically evaluated through the Gross Domestic Product (GDP).

Underemployment

Refers to the employment of workers in jobs that are below their skills level or part-time workers who would prefer to be full-time.

Unemployment

The situation when individuals who are capable of working and are seeking work are unable to find employment.