Which of the following will cause no change in producer surplus?
a. the imposition of a nonbinding price ceiling in the market
b. buyers expect the price of a good to be higher next month
c. the price of a substitute increases
d. income increases and buyers consider the good to be inferior
a
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Assume there is a price ceiling imposed on a good which is below the equilibrium price. Which of the following changes would reduce the size of the surplus? a. An increase in demand
b. A decrease in demand. c. An increase in supply. d. None of the above; there is no surplus.
Yvonne takes out a fixed-interest-rate loan and then inflation turns out to be higher than she had expected it to be. The real interest rate she pays is
a. higher than she had expected, and the real value of the loan is higher than she had expected. b. higher than she had expected, and the real value of the loan is lower than she had expected. c. lower than she had expected, and the real value of the loan is higher than she had expected. d. lower then she had expected, and the real value of the loan is lower than she had expected.
Fred purchases a bond, newly issued by the Big Time Corporation, for $20,000. The bond pays $1,000 to its holder at the end of the first, second, and third years and pays $21,000 upon its maturity at the end of four years. The principal amount of this bond is ________, the coupon rate is ________, and the term of this bond is ________.
A. $21,400; 5 percent; four years B. $1,000; 5 percent; four years C. $20,000; 5 percent; four years D. $20,000; $1,000; 50 percent
Employees with less experience tend to earn less than employees with more experience, because
A. the government requires that more-experienced employees be paid more than less-experienced employees. B. experience is a compensating differential. C. experience on the job increases an employee's human capital. D. it is only fair that a more-experienced employee be paid more than a less-experienced employee.