Figure 4-2
Given the demand and supply conditions shown in , if the government imposes a price ceiling of a, indicate the quantity consumers would like to buy and the amount producers would be willing to supply.
a.
Consumers would want to buy t; producers would be willing to sell r.
b.
Consumers would want to buy r; producers would be willing to sell t.
c.
Consumers would want to buy t; producers would be willing to sell s.
d.
Consumers would want to buy s; producers would be willing to sell s.
a
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When a government has decided on a permanent spending increase, a valid reason to increase borrowing rather than taxes might be to ________
A) to avoid an unnecessary stimulus to aggregate demand B) to shift the burden from domestic taxpayers to foreign bond holders C) to avoid distortions that might reduce long-run aggregate supply D) to avoid an increase in income inequality
A change in a nonprice factor of demand will cause:
A. a movement along the demand curve. B. a shift of the demand curve. C. the demand curve to rotate inward. D. the demand curve to rotate outward.
Suppose Mara and David compete, selling fried green tomatoes in a perfectly competitive market. If Mara increases output,
a. David must reduce output b. the price David can charge falls c. the price David can charge rises d. the price David can charge is unaffected e. David's economic profit must fall
A monopolist produces
a. more than the socially efficient quantity of output but at a higher price than in a competitive market. b. less than the socially efficient quantity of output but at a higher price than in a competitive market. c. the socially efficient quantity of output but at a higher price than in a competitive market. d. possibly more or possibly less than the socially efficient quantity of output, but definitely at a higher price than in a competitive market.