If a price floor is a binding constraint on themarket,

Select one:

A. the equilibrium price must be below the price floor.

B. the quantity demanded of the good will be greater than thequantity supplied.

C. then an increase in demand for the product could change thebinding constraint into a non-binding price floor if the demandcurve shift is sufficiently large to push equilibrium price abovethe floor.

D. All of the above

E. A and C, only

Question text

Economists generally hold that a housing subsidy is

Select one:

A. not an effective way to increase the amount of housingbecause rent control is more likely to increase the amount ofhousing then a housing subsidy.

B. a burden on the taxpayer because the housing subsidy must bepaid by government.

C. an efficient way to allocate housing, but not a good way tohelp the poor.

D. a burden on the renter because the housing subsidy must bepaid by the renter.

E. Both A and C are correct.

Question text

Price controls are usually enacted when policymakers

Select one:

A. want to allow individuals to establish market power andbecome the only buyer of a good.

B. believe that the market price of a good or service is unfairto buyers or sellers.

C. want to allow firms to establish market power and become theonly seller of a good.

D. want to make markets more efficient.

E. believe that the market price of a good or service should bepressured to move to the market equilibrium.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below A Answer to Question 1 Price floors are ... View the full answer