If a price ceiling is set below the equilibrium price in a market:
A. Rationing will be unnecessary
B. Surpluses of the commodity will develop
C. The quantity demanded will exceed the quantity supplied
D. The quantity supplied will exceed the quantity demanded
C. The quantity demanded will exceed the quantity supplied
You might also like to view...
If actual output is less than equilibrium output, firms will ________ output to keep from ________ inventories
A) increase; accumulating B) increase; depleting C) decrease; depleting D) decrease; accumulating
If the government raised land taxes $20/acre, this would increase the farmer's average fixed cost. How would that affect (a profit maximizing) farmers' decision about the quantity of corn to produce in the short run?
a. It would have little change because in the short run the farmer will consider only the Average Variable Cost (AVC) in making a decision on quantity supplied b. It will decrease the quantity the farmer is willing to supply because the Average Variable Cost (AVC) will increase for the farmer c. It will decrease the quantity the farmer is willing to supply because the farmer considers all costs in the short run in making a decision about quantity supplied d. None of the above
What do economists mean when they say there is "market failure"?
A. Markets have surpluses or shortages so that government rationing is necessary. B. Free markets have led to excessive profits. C. Business has introduced a product that consumers do not want. D. Free markets yield results that economists do not consider socially optimal.
The self-interest model of government:
a. suggests that government officials are selfish. b. explains why there are limits on government taxation and spending. c. shows who some government projects take place even if the cost exceeds the benefits. d. All of the above.