Identify the correct pair of items from the following Columns I and II Column I 1 Price Floor 2...........

Economics (CUET) Government Budget and Economy

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Identify the correct pair of items from the following Columns I and II:

Column I :

(1) Price Floor

(2) Price Ceiling

(3) Price Floor

(4) Price Ceiling

Column II :

(a) Government imposes below the equilibrium price.

(b) It is the maximum price, the producers of goods or services are allowed to charge.

(d) Government imposes lower limit on the price, which is higher than the equilibrium price.

1-(a)

2-(b)

3-(c)

4-(d)

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Explanation:

Option (2) is correct.
Explanation: Price ceiling is imposed by the government at a level lower than the equilibrium price. When the equilibrium price is too high for the consumers to afford basic goods like education, agricultural goods, then government fixes the maximum price in the interest of consumers.