38. The equilibrium price for a carved woodchuck is $20. A price-floor law is pu

Question

38. The equilibrium price for a carved woodchuck is $20. A price-floor law is put into effect. The price floor is enforced at $30 per carved woodchuck. What effect(s) will the price floor have? a. The price floor will lead to a shortage. b. The price floor will lead to a surplus. c. The price floor will have no effect. d. All of the above. e. (a) and (d). 39. We discussed tariffs, import quotas, and voluntary export restraints, all of which are interferences with international trade. Which of these has the potential to be beneficial to exporters? a. Tariffs b. Import quotas c. Voluntary export restraint:s d. All of the above e. (b) and (c) only 40. There is a decrease in the price of a movie download, from $5.50 to $4.50. As a result, the quantity demanded increases from 850 to 1150. What is the own-price elasticity of demand? a. 3.14159 b. zero c. 0.5 d. 1.0 e. 1.5

Explanation / Answer

38. When price of a commodity increases, its demand decreases. So as the price is set at $30 now, there will be a surplus.

So option b)

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