Suppose That the Price of Wheat Is Above Its Equilibrium

question 9

Multiple Choice

Suppose that the price of wheat is above its equilibrium price. You would expect to see

• A) a shortage on the market that causes prices to increase further.
• B) an increase in quantity demanded because of the high price.
• C) a leftward shift of the demand curve because of the high price.
• D) sellers begin to lower their prices because of the surplus of wheat.

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Definitions:

Income Tax Schedule

A chart or table used by taxpayers to determine their tax rate based on income levels, as specified by tax law.

Average Tax Rate

The percentage of income that is paid to the government as tax, calculated by dividing the total tax amount by the total income.

Payroll Taxes

Taxes imposed on employers and employees, calculated as a percentage of the salaries that employers pay their staff.

Medicare Taxes

Taxes collected in the United States to fund the Medicare program, which provides healthcare to the elderly and disabled.