Multiple Choice
If the intended aim of the price floor set at $12, as shown in the graph, was a net increase in the well-being of producers, then positive analysis would consider the policy to be:
A) effective if area C is larger than area E.
B) effective if areas E + B are larger than areas C + D + F.
C) ineffective if area B is larger than area E.
D) ineffective if areas E + B are larger than areas A + C + D + F.
Correct Answer:
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