Give an example of a price ceiling. Draw a corresponding diagram and explain why there is a continuing shortage.

What will be an ideal response?


The example used in the text is rent controls. A diagram should look like Figure 4-11 in the text. Quantity supplied is less than quantity demanded, but price is not allowed to rise. Therefore, the shortage continues.

Economics

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The owners of which type of firm have the least liability?

A. Limited partnership. B. Proprietorship. C. Partnership. D. Corporation.

Economics

An emissions tax equal to the marginal social cost of pollution at ___________ induces those believed to be polluting to internalize the externality and leads to the socially optimal quantity of pollution.

a. the socially optimal quantity of pollution b. the market-determined level of pollution c. the market-determined level of production d. zero pollution

Economics

What role does population growth play in economic development?

What will be an ideal response?

Economics

Governments in certain nations are considering adopting policies to raise their low birthrates because of the concern with having:

A. High rates of inflation B. High rates of unemployment C. Too many soldiers for national defense D. Too few workers to support social programs

Economics