Answer the following statements true (T) or false (F)
1. If the decrease in supply is less than the decrease in demand, then the equilibrium price will decrease.
2. A price ceiling imposed by the government is intended to benefit the sellers of the product.
3. An effective price ceiling will lower the equilibrium price and cause a surplus.
4. In response to the general public's complaints about "price gouging" by sellers, the government could impose a price floor.
1. TRUE
2. FALSE
3. FALSE
4. FALSE
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The figure above shows a local lawn cutting service's demand for labor curve when the price of cutting an acre of lawn is $50 per acre. If the wage rate rises from $100 per day to $200 per day, the firm's demand for labor curve
A) shifts leftward. B) shifts rightward. C) does not shift at all, but the firm moves upward along the curve. D) None of the above because this change shifts the supply of labor curve.
Which of the following events would cause the price of oranges to fall?
a. There is a shortage of oranges. b. The FDA announces that bananas cause strokes, and oranges and bananas are substitutes. c. The price of land throughout Florida decreases, and Florida produces a significant proportion of the nation's oranges. d. All of the above are correct.
An example of contractionary fiscal policy would be
a. cutting taxes b. decreasing government spending c. increasing production of consumer goods d. expanding the governments role in regulating private industry
The marginal product of capital is the increase in
A. capital needed to produce one more unit of output. B. labor needed to accompany a one-unit increase in capital. C. output from a one-unit increase in capital. D. output from a one-dollar increase in capital.