If government legislates a price floor that is below the equilibrium price
A. a shortage will develop.
B. a black market will soon develop.
C. a surplus will develop.
D. market price and quantity sold will be unaffected.
Answer: D. market price and quantity sold will be unaffected.
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A competitive (price-taking) firm will produce so long as its economic profit is sufficiently above zero to enable the firm to pay the owners of the firm for their time and effort.
Answer the following statement true (T) or false (F)
Why does the Fed attempt to achieve a low, stable rate of inflation rather than an inflation rate of 0%?
What will be an ideal response?
If a perfectly competitive industry is neither expanding nor contracting, we would typically expect that: a. accounting profits to be zero
b. economic profits to be zero. c. the price of the good will be stable d. both (b) and (c) would be true.
For an individual's supply curve of labor to be upward sloping:
a. the substitution effect must be greater than the income effect. b. the substitution effect must be equal to the income effect. c. the substitution effect must be less than the income effect. d. is an impossibility.