Relative to before the price ceiling, how much surplus do producers lose because of the ceiling?

The following questions refer to the accompanying diagram which shows the effects of a price ceiling. The initial price and quantity are P0 and Q0, respectively, and the price ceiling is imposed at the price P1. Assume that none of the potential deadweight loss can be avoided.



a. Area D + E + H

b. Area D + E

c. Area D + E + F

d. Area H.


b. Area D + E

Economics

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A good or service is considered scarce if

a. any quantity of it can be consumed at a zero price b. the amount people desire exceeds the amount available at a zero price c. the amount people desire exceeds the amount available at any price d. the amount people desire is less than the amount available at any price e. the amount people desire is less than the amount available at a zero price

Economics

A written contract between an employer and an employee creates value as long as:

a. the benefits exceed the costs of forming and enforcing it. b. the productivity of the employee is equivalent to the wage. c. on-the-job learning is unimportant. d. the relationship between the employer and the employee is short-term.

Economics

Opportunity cost refers to how many inputs a producer requires to produce a good

a. True b. False Indicate whether the statement is true or false

Economics