Asked by Dashiel Gayle Carreon on May 08, 2024
Verified
Which example would be considered a price floor?
A) a rent-controlled apartment
B) a maximum legal price that could be charged for gasoline during a time of war
C) the minimum wage
D) a government decree that capped the price of bottled water in the aftermath of a devastating hurricane
Price Floor
A price floor set by a government or organization, restricting how minimal the price of a product can be.
Rent-Controlled
Referring to housing for which rent levels are regulated by the government, often to make it more affordable.
Minimum Wage
The lowest legal hourly pay rate that employers can pay their workers.
- Embrace the study of price floors and observe their influence on the stability of markets.
- Identify the differences between price ceilings and price floors.
- Identify examples of price floors in real-world market scenarios.
Verified Answer
DA
David AndreasMay 12, 2024
Final Answer :
C
Explanation :
A price floor is a government-imposed minimum price that must be paid for a good or service. The minimum wage is an example of a price floor because employers are required to pay their employees at least a certain amount per hour of work. The other answer choices do not fit the definition of a price floor. A rent-controlled apartment is a maximum price that can be charged for rent. A maximum legal price for gasoline during wartime is a price ceiling. A government decree that capped the price of bottled water after a hurricane is a temporary price control, but not a price floor since it is not the minimum price that must be paid.
Learning Objectives
- Embrace the study of price floors and observe their influence on the stability of markets.
- Identify the differences between price ceilings and price floors.
- Identify examples of price floors in real-world market scenarios.
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