A price floor means that:
A. inflation is severe in this particular market.
B. sellers are artificially restricting supply to raise price.
C. government is imposing a maximum legal price that is typically below the equilibrium price.
D. government is imposing a minimum legal price that is typically above the equilibrium price.
Answer: D
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If the United Auto Workers' Union obtained a 15 percent increase in the wages of its workers, employment in the auto industry would most likely fall if
a. the demand for American-made automobiles was highly inelastic. b. American consumers considered foreign automobiles a poor substitute for American-made automobiles. c. the demand for American-made automobiles was highly elastic. d. the demand for American-made automobiles was increasing.
When considering choice architecture, a nudge:
A. can sometimes accomplish public policy goals in a less expensive way than traditional methods. B. presents choices that are similar to participants' ideal choices, but are slightly better than them. C. is a deliberate push by choice architect to get all people to behave a certain way. D. allows participants to choose among only choices that are good for them.
Which one of the following does NOT explain why the aggregate demand curve is downward sloping?
A. The real balances effect B. The entropy effect C. The foreign purchases effect D. The interest rate effect
Which of the following statements is correct?
A) Mrs. Lovejoy decides to invest in companies which she believes are producing their goods based on the preferences of consumers. Mrs. Lovejoy is therefore investing in companies that are allocatively efficient. B) Mrs. Lovejoy decides to invest in companies which she believes are producing their goods based on the preferences of consumers. Mrs. Lovejoy is therefore investing in companies that are productively efficient. C) Mrs. Lovejoy decides to invest in companies which she believes can produce their goods at the lowest possible cost. Mrs. Lovejoy is therefore investing in companies that are allocatively efficient. D) Mrs. Lovejoy decides to invest in companies which she believes can produce their goods at the lowest possible cost. Mrs. Lovejoy is therefore investing in companies that are both allocatively and productively efficient.