Simple Application of Price Theory - SS2 Economics Past Questions and Answers - page 1
What is minimum price legislation?
A government-imposed minimum price for a good or service.
A government-imposed maximum price for a good or service.
A government subsidy paid to producers of a good or service.
A tax on the production of a good or service.
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What is maximum price legislation?
A government subsidy paid to consumers of a good or service.
A government-imposed minimum price for a good or service.
A government-imposed maximum price for a good or service.
A tax on the consumption of a good or service.
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What is the likely outcome of setting a minimum price above the equilibrium price?
No effect on the market outcome.
A shortage of the good or service.
A surplus of the good or service.
An increase in demand for the good or service.
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What is the likely outcome of setting a maximum price below the equilibrium price?
A shortage of the good or service.
A surplus of the good or service.
No effect on the market outcome.
A decrease in demand for the good or service.
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How can minimum price legislation affect market outcomes?
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Why is maximum price legislation used?
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