A price ceiling set above the equilibrium price will cause which of the following?
A. a surplus
B. an increase in supply
C. a shortage
D. no effect on either the price or quantity
Answer: D
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Assume that a Chrysler automobile sells for $15,000 in the United States and that the exchange rate is $1 = €1.3 . For purchasing power parity to hold, the same car should sell in Germany for:
a. €15,000. b. €11,538. c. €19,500. d. €1,538. e. €15,500.
Assume that the demand curve for DVD players shifts to the left and the supply curve for DVD players shifts to the right, but the supply curve shifts more than the demand curve. As a result,
A) both the equilibrium price and quantity of DVD players will decrease. B) the equilibrium price of DVD players will decrease; the equilibrium quantity may increase or decrease. C) the equilibrium price of DVD players may increase or decrease; the equilibrium quantity will increase. D) the equilibrium price of DVD players will decrease; the equilibrium quantity will increase.
If people buy more of a generic brand when consumer income falls, it is an inferior good
a. True b. False Indicate whether the statement is true or false
Measuring poverty using an absolute income scale like the poverty line can be misleading because
a. income measures do not include the value of in-kind transfers. b. money is valued less highly by the poor than by the rich. c. the poor are not likely to participate in the labor market. d. income measures are adjusted for the effects of labor-market discrimination.