If the government imposed a price ceiling on gasoline above this good's current market clearing price, there would be
A) a shortage of gasoline. at the ceiling price.
B) a surplus of gasoline at the ceiling price.
C) an increase in the price of gasoline.
D) no change in the price of gasoline.
Answer: D
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A Herfindahl-Hirschman Index is calculated by
A) summing the amount of sales by the four largest firms and dividing by total industry sales. B) summing the squares of the market shares of each firm in the industry. C) dividing the number of firms wanting to merge by the total number in the industry. D) dividing the advertising expenditures of the firms that want to merge by total industry advertising expenditures.
Suppose the short-run production function is q = L0.5. If the marginal cost of producing the tenth unit is $5, what is the wage per unit of labor?
A) $1 B) $0.5 C) $0.25 D) It cannot be determined without more information.
When government intervenes in the production process because external costs exist, it typically attempts to shift the industry's
A) demand curve to the right. B) demand curve to the left. C) supply curve to the right. D) supply curve to the left.
Refer to the above figure. A price control has been set which has led to a surplus. This means that a
A) price ceiling has been set at P1. B) price floor has been set at P1. C) price ceiling has been set at P2. D) price floor has been set at P2.