The above figure shows the domestic market for wheat. Suppose this market is isolated from global competition and the government intervenes by setting a support price of $15 a ton. The quantity produced once the price support is in place is
A) 400 million tons.
B) 300 million tons.
C) 100 million tons.
D) 250 million tons.
E) 200 million tons.
A
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Suppose supply decreases, but there is no change in demand. As the market reaches its new equilibrium:
A. excess supply will lead the price to rise. B. excess demand will lead the price to rise. C. excess supply will lead the price to fall. D. excess demand will lead the price to fall.
According to the text, the federal government spends the most taxpayer-provided funds regulating which area of the economy?
A) the environment B) finance and banking C) consumer safety and health D) transportation
If an increase in the price of a product from $1 to $2 per unit leads to a decrease in the quantity demanded from 100 to 80 units, then demand is:
A. elastic. B. inelastic. C. unitary elastic. D. horizontal.
Which of the following represents a long-run adjustment?
A. Unable to meet foreign competition, a U.S. watch manufacturer sells one of its branch plants. B. A supermarket hires four additional clerks. C. A farmer uses an extra dose of fertilizer on his corn crop. D. A steel manufacturer cuts back on its purchases of coke and iron ore.