The market clearing price for gasoline is $1.50, but the maximum price that can be charged is $1.29. This is an example of
a) a price control that will lead to a surplus of gasoline on the market.
b) a price floor that will lead to a shortage of gasoline on the market.
c) a price ceiling that will lead to a shortage of gasoline on the market.
d) a price floor that will lead to a surplus of gasoline on the market.
Ans: c) a price ceiling that will lead to a shortage of gasoline on the market.
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Use a figure to illustrate the ineffectiveness of monetary policy to spur on an economy under a fixed exchange rate
What will be an ideal response?
Why might a nation seek to maintain a pegged exchange rate?
A) It makes business planning easier for firms involved in the global economy. B) It removes the need to intervene in the foreign exchange market. C) It ensures that the exchange rate will remain at its equilibrium. D) It makes their currency more attractive on the foreign exchange market.
Many ecologists argue that several species of whales are close to extinction. If this is TRUE, the reason is
A) inadequate enforcement of international laws. B) whales are a type of common property. C) the marginal benefit of hunting and killing a whale is greater than zero. D) whale-killing technology is too productive.
Consider the indifference curve map for nickels and quarters. Assume nickels are on the horizontal axis and quarters are on the vertical axis. The indifference curves for nickels and quarters are
a. straight lines with slope of -1/5. b. straight lines with a slope of -1. c. straight lines with a slope of -5. d. L shaped.