If the Intended Aim of the Price Floor Set in the Graph

question 133

Multiple Choice

If the intended aim of the price floor set in the graph shown was a net increase in the well-being of producers, then normative analysis would conclude that:

• A) the policy was effective, since surplus gained by producers through higher prices is greater than the surplus they lost through deadweight loss.
• B) the policy was ineffective, since surplus gained by producers through higher prices is greater than the surplus they lost through deadweight loss.
• C) the policy was effective, since surplus gained by producers through higher prices is greater than the surplus lost by consumers through higher prices.
• D) there is no "right" conclusion to be reached in a normative sense, since people have different opinions concerning what constitutes a better outcome.

---

Definitions:

Political Barriers

Refers to government-imposed restrictions that affect international trade and investment.

Philanthropic

Pertaining to the act of donating money, goods, time, or effort to support a charitable cause, often without expecting anything in return.

Legal

Pertains to the system of rules that are created and enforced through social or governmental institutions to regulate behavior, ensuring equity, justice, and fairness in society.

Corporate Social Responsibility

A business model where companies integrate social and environmental concerns in their operations and interactions with stakeholders.