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Question
The minimum wage law is an example of a
a. price floor.
b. price ceiling.
c. law that requires quantity demanded to equal quantity supplied.
d. law that allows individual employers and employees to make free decisions.
e. law that sets the minimum number of hours that an employee must work for wages during the week.
Answer
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Suppose Solomon lives in a community with no price controls. What do you expect will happen if his town borders a community where there is a binding price ceiling on most products?
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