The difference between quantity restrictions and price ceilings as to their effect on the market is that
A) only price ceilings make the market inefficient.
B) only quantity restrictions make the market inefficient.
C) while some consumers gain from price ceilings, no consumers gain from quantity restrictions.
D) while price ceilings are efficient, quantity restrictions are not.
Answer: C
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Along a straight-line demand curve, the
A. slope is constant. B. ratio P / Q constantly changes. C. elasticity grows much smaller toward the right-hand end. D. All of the responses are correct.
When Kim in Korea buys stock in GE (General Electric), NCO:
A. decreases. B. is unaffected. C. increases. D. is zero.
With reference to the graph above, if the intended aim of the price ceiling set at $6 was a net increase in the well-being of consumers:
A. then the policy was ineffective since consumers gained in surplus overall. B. then the policy was effective since consumers lost surplus overall. C. then the policy was ineffective since consumers lost surplus overall. D. then the policy was effective since consumers gained in surplus overall.
Monopolistically competitive markets may be socially inefficient because
a. most firms produce inferior products. b. government programs cannot effectively regulate price. c. firms earn zero economic profit. d. the market may have too much or too little entry by new firms.