A price ceiling set above the equilibrium price causes a surplus in the market
a. True
b. False
Indicate whether the statement is true or false
False
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Cost-plus pricing would be consistent with selecting the profit-maximizing price when
A) the demand for the firm's product is unit elastic. B) consumers value the product beyond its marginal cost. C) a firm has no difficulty estimating its demand curve. D) it results in a price that causes quantity sold to be where marginal revenue equals marginal cost.
Limits to self-interested payoff maximization that have been studied by behavioral economists include
a. limited cognitive ability. b. limited willpower. c. limits to self interest. d. all of the above.
Which of the following is a residual reward that accrues to business decision makers who use resources so as to increase their value?
a. opportunity cost b. earnings of employees c. economic profit d. interest earnings of corporate bondholders
If the economy is initially at long-run equilibrium and aggregate demand declines, then in the long run the price level
a. and output are higher than in the original long-run equilibrium. b. and output are lower than in the original long-run equilibrium. c. is lower and output is the same as the original long-run equilibrium. d. is the same and output is lower than in the original long-run equilibrium.