How Governments Should Intervene Is a _________ Question,and Why Governments

question 32

Multiple Choice

How governments should intervene is a _________ question,and why governments intervene in the way they do is a __________ question.

• A) normative; normative
• B) positive; negative
• C) normative; positive
• D) positive; normative

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Definitions:

Quantity Supplied

The measure of goods or services that producers intend and are able to put on the market at a chosen price for a specified duration.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers is equal to the quantity supplied by producers.

Effective Price Ceiling

An effective price ceiling is a government-imposed limit on the price that can be charged for a product or service, set below the market equilibrium, leading to shortages.

Equilibrium Price

The price point at which the market's supplied and demanded goods quantities meet.