A Government-Set Price Floor on a Product

question 79

Multiple Choice

A government-set price floor on a product:

• A) Does not interfere with the rationing function of price in a market system
• B) Will drive resources away from the production of the product
• C) Will attract more resources towards the production of the product
• D) Is intended to benefit the buyers of the product

---

Definitions:

Net Income

The total earnings of a company after deducting all expenses and taxes from total revenue.

Drawings

Amounts withdrawn by the owner(s) of a business for personal use.

FASB

The Financial Accounting Standards Board (FASB) is a private organization that establishes financial accounting and reporting standards for companies and nonprofit organizations in the United States.

SEC

Stands for the Securities and Exchange Commission, a U.S. federal agency responsible for regulating the securities industry and protecting investors.