Refer to the above figure. A price floor of $60 results in
A. a surplus of 100 units.
B. a shortage of 100 units.
C. a shortage of 200 units.
D. a surplus of 200 units.
Answer: A
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The social cost of production is:
A. the private cost of production plus the external cost generated by production. B. the external cost generated by production. C. the private cost of production that is greater than the benefit of production. D. the external cost of production that is greater than the benefit of production.
In order to isolate the substitution effect of a price increase, a consumer
a. must be given a lower price on the other good so that he can achieve his original indifference curve. b. must be given enough of the other good so that his consumption of that good is not influenced. c. must be given enough additional income to allow him to achieve his original indifference curve. d. must be given enough additional income to allow him to purchase the original quantity of the good.
What is allocative efficiency and how does it relate to the production possibilities frontier?
What will be an ideal response?
Which of the following is considered a command economy?
a. communism b. socialism c. fascism d. All of these.