Use the Following to Answer Questions

question 153

Multiple Choice

Use the following to answer questions:
Figure: The Market for Butter
-(Figure: The Market for Butter) Use Figure: The Market for Butter.If a government price floor of $1.10 is imposed on this market,an inefficiency will result in the form of a _____ of _____ million kilograms of butter.

• A) surplus;4.5
• B) shortage;4.5
• C) surplus;3
• D) shortage;1.5

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Definitions:

Goods Imports

The process of bringing goods from foreign countries into one’s own country for use or sale.

Balance Of Payments

A record of all financial transactions made between consumers, businesses, and the government in one country with others.

Hypothetical Data

Data or information that is assumed or simulated for the purpose of analysis or discussion.

Surplus

A situation in which the quantity supplied of a good exceeds the quantity demanded at the current price, often leading to a price decrease.