A binding price ceiling is best defined as a price.
The minimum wage is an example of a price floor a true b false.
In those states that impose such a minimum wage it is more likely that the minimum wage acts as a binding.
A price floor causes excess demand resulting in the need to ration by some means other than price.
51 if we define unemployment as a surplus of labor then a minimum wage set above the market clearing wage will increase the level of unemployment.
50 an excess supply occurs at prices below the equilibrium price.
An example of a price floor is minimum wage laws where the government sets out the minimum hourly rate that can be paid for labour.
In a labor market a minimum wage is an example of a price floor.
A surplus may result in an alternative rationing mechanism being developed.
48 minimum wage is an example of a price floor.
A price floor sets the lowest legal price and that is precisely what a minimum wage does.
The minimum wage is an example of a price floor.
A non binding price floor causes a change in the market price.
See how much you know about price controls by answering true or false to these questions.
Because this is the most popular and recognizable example of a price floor we will concentrate on it for the rest of this.
Imposed by government below equilibrium price b.
When the minimum wage is set above the equilibrium market price for.
Before considering an example of price floors minimum wages let s examine the problem in general terms.
Price floor causing excess supply in the market.
When a binding price floor is imposed on a market for a good some people who want to sell the good cannot do so.
Tariffs increase equilibrium price and quantity.
In this case the wage is the price of labour and employees are the suppliers of labor and the company is the consumer of employees labour.
A binding minimum wage causes the quantity of labor demanded to exceed the quantity of labor supplied.
The minimum wage is an example of a price floor.
For more on the minimum wage see 3 reasons the 15 minimum wage is a bad way to help the poor.
It sets the lowest legal wage rate.
Discrimination is an example of a rationing mechanism that may naturally develop in response to a binding price floor.
In modern western countries labor is the primary recipient of price floors 1 in particular the government imposes a minimum wage making it illegal for an employer to pay a worker less than a certain amount per hour.
A true b false 49 a minimum wage set below the market equilibrium wage will result in higher unemployment.
The minimum wage is an example of a price ceiling.
