A Price Floor

question 220

Multiple Choice

A price floor:

• A) is a maximum price allowed by law.
• B) is a minimum price allowed by law.
• C) has an effect only when it is set below the market price.
• D) has little effect on market activity.

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Definitions:

Stimuli

External events or circumstances that evoke a response from an organism.

Feared

An emotion or feeling of apprehension or dread towards a specific object, situation, or outcome.

False Alarm

An event where a warning or concern is raised without an actual threat or danger being present.

Panic

An extreme fear reaction that is triggered even though there is nothing to be afraid of (it is essentially a “false alarm”).