Black markets are frequent occurrence in markets with price ceilings.
Answer the following statement true (T) or false (F)
True
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Suppose the residents of Metropolis travel to work either by bus or train. If the price of train tickets increases, then:
A. the demand for train tickets will decrease. B. the demand for bus tickets will increase. C. the demand for bus tickets will decrease. D. the demand for train tickets will increase.
Show in a diagram an S-curve and a 45-degree line. Are all three points of intersection stable equilibrium points? Explain
What will be an ideal response?
The rapid rise in oil prices during 2007-2008 can be explained by noting the fact that
a. the supply of oil increased more rapidly than the demand for oil increased b. the demand for oil increased more rapidly than the supply for oil increased c. the demand for oil decreased at the same time that the supply of oil increased d. the quantity demanded of oil increased more rapidly than the quantity supplied of oil increased e. the quantity supplied of oil increased more rapidly than the quantity demanded of oil increased
If a profit-maximizing firm in a competitive market discovers that, at its current level of production, price is greater than marginal cost, it should
a. shut down. b. reduce its output but continue operating. c. continue to produce at the current levels. d. increase its output.