The government sometimes creates an excess demand for a product by setting a maximum price at which the product may be sold to consumers. This is sometimes called a:
A. price ceiling.
B. price floor.
C. tax.
D. subsidy.
Answer: A
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According to the EPA’s first prospective study of the Clean Air Act Amendments (CAAA) of 1990,
a. these amendments do not pass the feasibility test b. the estimated present value of benefits outweigh the present value of costs c. the CAAA achieve allocative efficiency d. the present value of net benefits associated with these amendments are negative
In a closed economy with no government, aggregate expenditure is
A) consumption plus investment. B) saving plus investment. C) consumption plus the MPC. D) MPC + MPS. E) none of the above.
An individual's value for a good or service is the
a. The amount of money he or she used to pay for a good b. The amount of money he or she is willing to pay for it c. The amount of money he or she has to spend on goods d. None of the above
Suppose that a firm has to pay a 10% tax on its total revenue. This has the effect of
a. flattening marginal cost. b. increasing marginal revenue. c. decreasing marginal cost. d. decreasing marginal revenue.