Suppose the government has imposed a price ceiling on sliced sandwich bread. Which of the following events could transform the price ceiling from one that is binding to one that is not binding?
a. An increase in the price of flour, which is used to make bread.
b. A decrease in the price of lunch meat.
c. A decrease in the price of unsliced bread, which people consider a substitute for sliced bread.
d. An decrease in the price of peanut butter and jelly.
c
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A shift of the demand curve for a good occurs whenever new technologies make inputs used in producing that good available at lower prices.
Answer the following statement true (T) or false (F)
What best defines active policy making?
A) taking action to offset a change in economic performance B) taking action to increase long-term economic growth C) taking action to make markets more competitive so as to improve efficiency D) taking action to make markets less competitive so as to improve equity
A newspaper headline announces that "more college graduates than ever are in the labor force." This is an example of
a. microeconomic analysis b. an abstraction c. a value judgment d. a positive statement e. macroeconomic analysis
In order to fit linear supply and demand curves to data, we need to find the parameters, a, b, c, and d, of the corresponding functions.
A.One procedure for finding those values uses the known values of: the price elasticity of demand and supply and the income elasticity of demand. B. the price and quantity of equilibrium and the elasticities of supply and demand. C. any two known values of price and quantity and income elasticity of demand. D. the demand equation and income elasticity of demand.