g A government will create a surplus in a market when it Multiple Choice sets a price floor above the equilibrium price. sets a price floor below the equilibrium price. sets a price ceiling above the equilibrium price. sets a price ceiling below the equilibrium price.

sets a price floor above the equilibrium price.

Explanation:

Price floor is defined as a government imposed price regime that sets the minimum amount that suppliers can charge buyers for a particular good.

Suppliers are not allowed to charge below this price. For this strategy to be effective it needs to be a price that is above equillibrum price.

When price floor is above equillibrum price quantity supplied exceeds quantity demanded. This results in a surplus of goods and services.

The surplus effect is illustrated in the attached diagram.

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know

answer; measurable outcome;