Gasoline prices are rising because OPEC has cut the supply of oil they are willing to sell in the world oil market. You hear someone in a restaurant say that the government should put a ceiling on the price of gasoline to protect citizens from price gouging. Discuss the pros and cons of a price ceiling on gasoline.
What will be an ideal response?
The pro is that the people who do get gasoline will pay lower prices for it. The con is that with price ceilings there will be long lines and "sold out" signs at the gas station. So while the price ceiling might save money on gasoline when you drive to Florida for spring break, the shortages might mean that you can't find the gasoline you need to get back to school afterwards.
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The United Auto Workers union is largely responsible for the historically high pay of American auto workers by negotiating pay raises above those obtained by workers in other industries. In addition to increasing the pay of auto workers, what other long-run effect would this high pay have on the use of auto workers?
Refer to the graph shown. If the firm is producing 120 units of output, profit is equal to:
A. $30. B. $38. C. $0. D. ?$38.
Use the following table to answer the question below.OutputTotal Cost0$10118225335453573698The marginal cost associated with the production of the sixth unit of output is
A. $16.33. B. $25.00. C. $98.00. D. $10.00.
Which of the following is included in M2?
A. commercial paper B. savings accounts C. U.S. Treasury bonds D. stocks