The U.S. government restricts the production of peanuts by limiting production licenses. By also prohibiting imports, the government maintains prices well above levels peanut farmers would obtain if supply were not restricted. This program has the same effect as a
A. price ceiling.
B. price floor.
C. opportunity cost.
D. shortage.
E. efficiency move.
Answer: B
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a. The aggregate demand curve shows the various levels of expenditures in the economy at alternative price levels. b. The aggregate demand curve implies a positive relationship between inflation and unemployment. c. The aggregate demand curve is identical to the income consumption curve. d. The aggregate demand curve has the same slope as the aggregate supply curve. e. The aggregate demand curve relates relative prices to the quantity demanded of a particular good.
When it comes to active policymaking most economists agree that
A. it is likely that active policymaking will have long term effects on the economy. B. active policy making should be used over passive policymaking. C. it is unlikely that active policymaking will have any long term effects on the economy. D. it will lead to long term shocks in the system.
Airlines often engage in last-minute price cutting to fill remaining empty seats on a flight because this practice will generally
A) prevent rival airlines from competing in that market. B) increase marginal revenue more than marginal cost. C) maximize marginal revenue. D) discourage rivals from matching price cuts.