IB Multiple Choice - Government Intervention

Test yourself on IB Multiple Choice - Government Intervention

• What would be the impact of imposing a price floor below the equilibrium price?

• If a price floor benefits producers, why does a price floor reduce social surplus?

• Following the imposition of this price floor, which area of the diagram represents the deadweight loss?

• Following the imposition of this price floor, which area of the diagram represents the new (reduced) social surplus?

• Following the imposition of this price ceiling, which area of the diagram represents the deadweight loss?