Suppose market demand and supply are given by Qd = 100 - 2P and QS = 5 + 3P. If the government sets a price floor of $30 and agrees to purchase all surplus at $30 per unit, the total cost to the government will be:
A. $1,125.
B. $1,650.
C. $1,375.
D. $900.
Answer: B
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As the price of a resource decreases,
a. demand for that resource increases. b. the quantity demanded of that resource decreases. c. the supply of that resource increases. d. producers are more willing and able to hire that resource. e. producers are less willing and able to hire that resource.
If the government were to run a budget deficit and wanted to finance it by printing money, would it have the central bank conduct open market purchases or open market sales?
Assuming short-run sticky prices, the same monetary policy result may be achieved by targeting the money supply or the nominal rate of interest whenever:
a. the demand for money is stable. b. interest income is not taxable. c. changes in the supply of money are small and predictable. d. real income is constant.
If the population increases, the market demand for most products will:
A. not change. B. decrease. C. increase. D. depend on supply.