If a price ceiling is not binding, then
a. the equilibrium price is above the price ceiling.
b. the equilibrium price is below the price ceiling.
c. it has no legal enforcement mechanism.
d. None of the above is correct because all price ceilings must be binding.
b
You might also like to view...
Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
A minimum wage that is above the equilibrium wage rate
A) increases efficiency within the labor market. B) increases the quantity of labor demanded. C) creates a deadweight loss. D) has no effect on the labor market because it is set above the equilibrium wage rate. E) None of the above answers is correct.
The main problem with using the infant industries argument to justify protecting an industry from foreign competition is that:
A. all industries will claim that they are infant industries in order to gain protection. B. the protected industry will become too efficient and drive out foreign competition. C. once in place, it is difficult to remove protection even as the industry matures. D. it causes the goods that are produced in the protected industry to have lower prices.
A point on the frontier of the production possibilities curve is:
A. attainable and the economy is efficient. B. unattainable and the economy is inefficient. C. unattainable, but the economy is efficient. D. attainable, but the economy is inefficient.