When policymakers set prices by legal decree, they
a. are usually following the advice of mainstream economists.
b. improve the organization of economic activity.
c. obscure the signals that normally guide the allocation of society's resources.
d. are demonstrating a willingness to sacrifice fairness for the sake of a gain in efficiency.
c
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The difference between the ________ and the ________ from the sale of a product is called producer surplus
A) highest price a firm would have been willing to accept; lowest price it was willing to accept B) cost to produce a product; profit received C) lowest price a firm would have been willing to accept; price it actually receives D) cost to produce a product; price a firm actually receives
When a price floor is above the equilibrium price,
a. quantity demanded will exceed quantity supplied, so there will be a shortage. b. quantity supplied will exceed quantity demanded, so there will be a surplus. c. the market will be in equilibrium. d. This is a trick question because price floors are generally set below the equilibrium price.
Explain how a change in the interest rate on reserves affects the money supply.
What will be an ideal response?
The opportunity cost of producing one keg of beer in Italy is
A. 3/2 pizzas.
B. 12 pizzas.
C. 4 pizzas.
D. 1/12 pizzas.