Suppose the Government Decides to Eliminate a Binding Price Floor

question 70

Multiple Choice

Suppose the government decides to eliminate a binding price floor that it had previously imposed on a particular good.It can be expected that

• A)the price would increase,the quantity demanded would decrease and the quantity supplied would increase.
• B)the price would increase,the quantity demanded would increase and the quantity supplied would decrease.
• C)the price would decrease,the quantity demanded would decrease and the quantity supplied would increase.
• D)the price would decrease,the quantity demanded would increase and the quantity supplied would decrease.
• E)no changes would take place.

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Definitions:

Reinforcing Value

The increase in likelihood of a behavior reoccurring, due to the positive outcomes or rewards associated with it.

Negative Reinforcement

A behavior modification technique that increases the likelihood of a behavior by removing or avoiding a negative outcome or stimulus.

Undesirable Consequence

Negative outcomes or punishments associated with a specific action or behavior, which function to decrease the likelihood of the behavior reoccurring.

Behaviour

The actions or reactions of a person or object in response to external or internal stimuli.