Question

question 16
which term refers to a legally established maximum price that firms may charge?
o a price floor
o a tariff
o a price ceiling
o a subsidy
question 17
which of the following would result in a positive externality?
o a local government establishes a price ceiling on rental apartments.
o medical research results in a cure for malaria.
o an electric utility burns coal that causes acid rain.
o mcdonalds eliminates all salads from its menu.

Explanation:

For Question 16: A price ceiling is a legally - set maximum price. A price floor is a minimum price, a tariff is a tax on imports, and a subsidy is financial aid.
For Question 17: Positive externalities occur when the actions of one party benefit others. Medical research resulting in a cure for malaria benefits society as a whole, which is a positive externality. A price - ceiling on rental apartments is a market intervention, burning coal causing acid rain is a negative externality, and McDonald's eliminating salads is a business decision with no obvious externality.

Answer:

Question 16: C. a price ceiling
Question 17: B. Medical research results in a cure for malaria.