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Question 7. Suppose the government imposes a price floor on cheese. The price floor is currently non-binding. Which of the following events could transform that non-binding price floor into a binding price floor? For each, simply state YES or NO.
Cheese and crackers are complements and the price of crackers increases.
The price of milk, a main ingredient in making cheese, decreases.
Cheese is a normal good and the income of cheese buyers increases.
An ad campaign about the benefits of consuming dairy products proves to be very successful.
The number of cheese producers increases.
Question 7. Suppose the government imposes a price floor on cheese. The price floor is currently non-binding. Which of the following events could transform that non-binding price floor into a binding price floor? For each, simply state YES or NO.
Cheese and crackers are complements and the price of crackers increases.
The price of milk, a main ingredient in making cheese, decreases.
Cheese is a normal good and the income of cheese buyers increases.
An ad campaign about the benefits of consuming dairy products proves to be very successful.
The number of cheese producers increases.
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Nestor RutherfordLv2
5 Mar 2018