A price ceiling set below the equilibrium price is nonbinding
a. True
b. False
Indicate whether the statement is true or false
False
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Suppose a competitive firm is paying a wage of $12 an hour and sells its product at $3 per unit. Assume that labor is the only input. If the last worker hired produces four units of output per hour, then to maximize profits the firm should
A) hire another worker. B) not change the number of workers it currently hires. C) lay off some workers. D) There is not enough information to answer the question.
Refer to Figure 6.2. The situation pictured is one of
A) constant returns to scale, because the line through the origin is linear. B) decreasing returns to scale, because the isoquants are convex. C) decreasing returns to scale, because doubling inputs results in less than double the amount of output. D) increasing returns to scale, because the isoquants are convex. E) increasing returns to scale, because doubling inputs results in more than double the amount of output.
All of the following were classical economists EXCEPT
A) Adam Smith B) A. C. Pigou C) David Ricardo D) John Maynard Keynes.
Identify the correct statement about changes in money supply.
a. A decrease in money supply causes interest rates to fall b. A decrease in money supply causes investment spending to increase. c. A decrease in money supply causes gross domestic product to increase. d. A decrease in money supply causes investment spending to decrease. e. A decrease in money supply causes aggregate expenditure to increase.