A price floor that is set above market equilibrium will cause
A) an excess quantity demanded.
B) a shortage.
C) a surplus.
D) queuing on the part of consumers.
Answer: C
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Banks hold some deposits on reserve at the Fed because
A) the Fed requires every bank to hold at least $100 million on deposit at all times. B) the Fed will insure those deposits, but will not insure regular bank deposits. C) these are membership dues for being a member bank. D) these deposits meet the reserve requirements of the Fed.
On the graph above, an example of a positive demand shock is the movement from point ________ to point ________
A) F; G B) H; I C) F; H D) H; F E) none of the above
Figure 9.3Figure 9.3 shows the cost structure of a firm in a perfectly competitive market. The price at which the firm is just as well off either operating or shutting down is:
A. $3. B. $4.50. C. $6. D. $10.
Why do some markets have more firms than others?
What will be an ideal response?