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Refer to Figure 5 - 5. Suppose this market for gardening services is in a free - market equilibrium. If the government then imposes a price floor of $50 per hour for gardening services, the result would be

Refer to Figure 5 - 5. Suppose this market for gardening services is in a free - market equilibrium. If the government then imposes a price floor of $50 per hour for gardening services, the result would be

Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
8th Edition
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter7: Consumers, Producers, And The Efficiency Of Markets
Section: Chapter Questions
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70 Supply 60 50 40 2 30 20 10 Demand 1000 2000 3000 4000 5000 6000 7000 8000 Quantity (number of hours of gardening service per month) FIGURE 5-5 Refer to Figure 5 - 5. Suppose this market for gardening services is in a free - market equilibrium. If the government then imposes a price floor of $50 per hour for gardening services, the result would be A. a loss of economic surplus of the area 1. O B. a loss of economic surplus of the areas 6 and 7. O C. a loss of economic surplus of the areas 2 and 6. O D. a loss of economic surplus of the areas 2, 3, 4, 6, and 7. O E. a loss of economic surplus of the areas 1, 2, 3, and 4. Price ($s per hour)
Transcribed Image Text:70 Supply 60 50 40 2 30 20 10 Demand 1000 2000 3000 4000 5000 6000 7000 8000 Quantity (number of hours of gardening service per month) FIGURE 5-5 Refer to Figure 5 - 5. Suppose this market for gardening services is in a free - market equilibrium. If the government then imposes a price floor of $50 per hour for gardening services, the result would be A. a loss of economic surplus of the area 1. O B. a loss of economic surplus of the areas 6 and 7. O C. a loss of economic surplus of the areas 2 and 6. O D. a loss of economic surplus of the areas 2, 3, 4, 6, and 7. O E. a loss of economic surplus of the areas 1, 2, 3, and 4. Price ($s per hour)
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