The government of Economica announces that it will purchase its farmers’ surplus of milk. From this announcement, you can infer that Economica has a
A. free market for milk.
B. price ceiling above the equilibrium price for milk.
C. price floor above the equilibrium price for milk.
D. price floor below the equilibrium price for milk.
Answer: C
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In the long run which of the following is true?
A) There are no fixed costs. B) The size of a firm's physical plant can be changed but the firm cannot adopt new technology. C) The firm can vary its explicit costs but not its implicit costs. D) Total cost = fixed cost + variable cost.
A bond with default risk will always have a ________ risk premium and an increase in its default risk will ________ the risk premium
A) positive; raise B) positive; lower C) negative; raise D) negative; lower
Reinsurance allows ________ to reduce the risks of exposure by allocating a portion of the risk to ________ in exchange for a portion of the premium
A) insurance companies; another insurance company B) insurance companies; the insured C) the insured; the insurance company D) the insured; a bank
If government policy makers become more secretive, then the short run aggregate supply curve should get
a. flatter. b. more horizontal. c. vertical. d. steeper.