If the Equilibrium Price for Some Product Is $1000,a Price

question 66

Multiple Choice

If the equilibrium price for some product is $1000,a price ceiling of $800 will result in

• A)the same general effects as a price ceiling of $1200.
• B)the same general effects as a price floor of $1200.
• C)the same general effects as a price ceiling of $600.
• D)massive surpluses of the good.
• E)no effects because the price ceiling is not binding at that price.

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Definitions:

Buying Stock

The act of purchasing ownership shares in a corporation, thereby obtaining a stake in its earnings and assets.

Expected Dividend

The forecasted dividend payment announced by a corporation's board of directors to its shareholders.

Last Paid a Dividend

The most recent instance when a company distributed a portion of its earnings to shareholders in the form of dividends.

Required Rate of Return

The required rate of return is the minimum annual percentage earned by an investment that will entice individuals or companies to put money into a particular security or project.