If There Are Floods or Droughts or a Decrease in the Availability

question 17

Multiple Choice

If there are floods or droughts or a decrease in the availability of raw materials

• A)aggregate supply shifts right.
• B)output falls in the short run.
• C)prices fall in the short run.
• D)None of the above is correct.

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Definitions:

Permanent Surplus

A situation in which the supply of a particular good or service persistently exceeds demand, often leading to long-term price declines.

Price Support Payments

are subsidies or financial assistance provided by the government to farmers or producers to maintain the market price of an agricultural product above its market equilibrium.

Minimum Wage Law

Minimum Wage Law is legislation that sets the lowest hourly rate that can be paid to workers, aiming to ensure a minimum standard of living for employees.

Price Floor

A government or group-imposed limit on how low a price can be charged for a product, usually above the equilibrium price, to protect producers.