8
lesson pretestMultiple Choice

Pretest

Question 8 • Economics

The lowest amount a manufacturer can pay factory workers is an example of

Answer
A
an elastic service.
B
an incentive.
C
a price ceiling.
D
a price floor.

Explanation

A minimum amount an employer must pay workers is a legally set minimum wage. A minimum legal price is called a price floor, so the lowest amount a manufacturer can pay factory workers is a price floor. A price ceiling, by contrast, sets a legal maximum price.

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