Situation 4-1 During the winter of 1973-74, a general system of wage and price controls (including a price ceiling on gasoline) was in force in the United States. At the beginning of 1974, some oil-producing countries imposed an oil embargo (a legal prohibition on commerce) on the West. In the spring of 1974, price controls were abolished. Refer to Situation 4-1. Before the oil embargo, the price
ceiling on gasoline had no noticeable effect on the market. What is the most likely explanation for this?
A) The equilibrium price of gasoline was probably below the price ceiling.
B) The demand curve for gasoline in the 1970s was vertical.
C) The supply curve for gasoline in the 1970s was vertical.
D) The equilibrium price of gasoline was probably above the price ceiling.
A
You might also like to view...
The relationship between distance traveled in 5 hours and speed shown in the figure above is
A) direct, linear. B) inverse, linear. C) direct, non-linear. D) inverse, positive. E) direct, negative.
If the quantity of nail polish supplied is represented by the equation QS = -3 + 2P then the corresponding price of nail polish is represented by the equation
A) P = 1.5 - 0.5QS. B) P = 2QS - 6. C) P = 2QS + 6. D) P = 0.5QS + 1.5.
The figure below shows the supply and demand curves for oranges in Smallville.
When this market is in equilibrium, total economic surplus is ________ per day.
A. $320 B. $80 C. $160 D. $0
Answer the following questions true (T) or false (F)
1. The labor force participation rates of women have rapidly increased since 1948. 2. The household survey asks adults about their employment status and is used to compile the monthly unemployment rate. 3. The household survey is compiled from firms who answer questions about the number of persons who are employed and on the company payroll.