Refer to the Above Diagram for the Milk Market

question 10

Multiple Choice

Refer to the above diagram for the milk market. If the price were $2 per gallon, then there would be a:

• A) Shortage of 20 million gallons
• B) Shortage of 10 million gallons
• C) Surplus of 10 million gallons
• D) Surplus of 30 million gallons

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Definitions:

Leisure

Time spent away from work and essential domestic activities, typically used for relaxation, recreation, or personal interests.

Economic Motives

The underlying reasons that guide individuals or entities to make decisions regarding the allocation of resources.

Disposable Income

This is the amount of money that households have available for spending and saving after income taxes have been accounted for.

Consumption

refers to the total amount of goods and services bought and used by households and individuals.