Refer to Scenario 3

question 292

Multiple Choice

Refer to Scenario 3.3 below to answer the question(s) that follow.
SCENARIO 3.3:
-Mustard and mayonnaise are substitutes.
-Mustard and relish are complements.
-Mustard is a normal good.
-During the summer, about 50% of all mustard was recalled by manufacturers and removed from store shelves.
-Refer to Scenario 3.3. The government wants to protect consumers from rising food prices. Therefore, price restrictions are imposed on mustard producers, prohibiting them from raising the price of mustard. This will cause

• A) an excess demand for mustard.
• B) an excess supply of mustard.
• C) an increase in the demand for mustard.
• D) a decrease in the supply of mustard.

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Definitions:

Labor Relations

The study and practice of managing unionized employment situations, including negotiations between employers and labor unions.

Interstate Commerce

refers to any business or trade activities that cross state lines or affect more than one state in the United States, subject to federal regulation.

Federal Funds

Refers to the reserve balances that banks and other financial institutions maintain at Federal Reserve Banks, often lent and borrowed overnight between banks to meet reserve requirements.

Social Welfare Objectives

Goals aimed at improving the well-being and living standards of individuals and communities, typically through government policies and programs.