To say that a price ceiling is nonbinding is to say that the price ceiling
a. results in a surplus
b. is set above the equilibrium price.
c. causes quantity demanded to exceed quantity supplied.
d. All of the above are correct.
b
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Refer to Figure 6-9. The data in the diagram indicates that DVDs are
A) luxury goods. B) inelastic goods. C) necessities. D) both luxury goods and inelastic goods. E) both necessities and inelastic goods.
If an increase in the price of one input causes an increase in demand for labor, the two inputs are
A) complementary. B) substitutes. C) interchangeable. D) flexible.
Assume that both the corporate and noncorporate sectors are in long-run equilibrium before the imposition of a corporate profits tax. In the short run, the imposition of a corporate profits tax will
A. decrease profits in both the corporate and noncorporate sectors. B. not change profits in the noncorporate sector, but decrease profits in the corporate sector. C. not change profits in either the corporate or the noncorporate sector. D. not change profits in the corporate sector, but increase profits in the noncorporate sector.
Which of the following does NOT influence the price elasticity of demand?
A) the amount by which the demand curve shifts when the price of another good changes B) the number of substitutes available to consumers C) the price of the good relative to total income D) the time period buyers have to respond to a price change E) whether the good is a necessity or a luxury