If the government imposes a price floor that is higher than the market clearing price, then
A) consumer surplus will increase while producer surplus will decrease.
B) consumer surplus will decrease while producer surplus will increase.
C) both consumer surplus and producer surplus will decrease.
D) both consumer surplus and producer surplus will increase.
C
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Monetary policy will have a large income effect provided the
A) IS curve is flat. B) LM curve is steep. C) IS curve is steep. D) LM curve is flat.
Suppose that U.S. citizens purchase more cars made in Korea, and Koreans purchase more bonds issued by U.S. corporations. Other things the same, these actions
a. raise both U.S. net exports and U.S. net capital outflows. b. raise U.S. net exports and lower U.S. net capital outflows. c. lower both U.S. net exports and U.S. net capital outflows. d. lower U.S. net exports and raise U.S. net capital outflows.
Over time, foreign investment is credited with the greatest contribution to economic growth in the United States.
Answer the following statement true (T) or false (F)
Microsoft hires marketing and sales specialists to decide what prices it should set for its products, whereas a wealthy corn farmer in Iowa, who sells his output in the world commodity market, does not. Why is this so?
A) because Microsoft is large enough to hire the best people in the field B) because Microsoft could potentially lose sales if it sets prices indiscriminately C) because the wealthy corn farmer is a price maker who sets his price independently of the market price, but Microsoft's optimal output depends on the price it selects D) because unlike Microsoft, the wealthy corn farmer is probably a monopolist