Assume there is a price ceiling imposed on a good which is below the equilibrium price. Which of the following changes would reduce the size of the surplus?
a. An increase in demand
b. A decrease in demand.
c. An increase in supply.
d. None of the above; there is no surplus.
d
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Which of the following will result in a firm increasing its level of production?
a. An increase in its Marginal Costs. b. A decrease in its Marginal Revenue. c. An increase in its Fixed Costs. d. An increase in the price of its product.
When consumers' incomes increased 10 percent, the quantity of milk bought increased 5 percent. This result means
A) the demand for milk is income elastic. B) milk is a necessity. C) milk is a luxury. D) milk is an inferior good.
The point of tangency between a consumer's budget constraint and his or her indifference curve represents
a. complete satisfaction for the consumer. b. the equivalence of prices the consumer pays. c. constrained utility maximization for the consumer. d. the least he or she can spend.
One way the government can enhance efficiency through the management of common resources is by:
A. banning the good. B. setting quotas for the good. C. government provision of the good. D. All of these can be effective and efficiency-enhancing solutions.