Typically,the Government Limits the Quantity of a Good That Can

question 61

Multiple Choice

Typically,the government limits the quantity of a good that can be bought and sold by:

• A)licensing the suppliers.
• B)setting a price floor below the equilibrium price.
• C)maintaining the equilibrium price regardless of changes in demand and supply.
• D)setting a price ceiling above the equilibrium price.

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Definitions:

Capital

Financial assets or the financial value of assets, such as funds held in deposit accounts as well as the physical factors of production.

Expansion Path

A curve that shows how the input combinations of a firm change as it increases output, keeping the input ratios constant.

Least-Cost Combination

A production point where the mix of inputs results in the lowest possible cost for a given output level.

Input Prices

The prices of the resources (like labor, materials, and capital) used in the production of goods or services.