An effective price ceiling is best defined as a price:
A. lower than any supplier is willing to sell.
B. imposed by government below equilibrium price.
C. higher than any consumer is willing to pay.
D. imposed by government above equilibrium price.
Answer: B
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When a shortage exists
A) the price is below the market clearing price. B) quantity demanded exceeds quantity supplied. C) an excess quantity demanded exists. D) all of the above
Planned consumption and planned investment are
a. the only important parts of aggregate expenditure in the U.S. economy. b. less important than government spending in the U.S. economy. c. two important components of aggregate expenditure. d. almost always equal.
Which of the following best represents the effects of a decrease in the price of tea? a. A leftward shift in the demand for tea
b. A downward movement along the demand curve for tea. c. A rightward shift in the demand for tea. d. An upward movement along the demand curve for tea.
If the government required car makers to install more costly and effective emission control devices on cars, it will lead to:
a. a higher price of cars and a larger quantity of cars sold. b. a higher price of cars and a smaller quantity of cars sold. c. a lower price of cars and a larger quantity of cars sold. d. a lower price of cars and a smaller quantity of cars sold.