Suppose that in a free market, 2,000 patients purchase an operation to receive an artificial heart at a price of $500,000 per operation. Without the heart, each patient will die. The government decides this price is too high and imposes a maximum price of $200,000. Everything else equal,
A. more patients will now die.
B. fewer patients will now die.
C. more patients will now die only if the demand curve is vertical.
D. more patients will now die only if the demand curve is horizontal.
Answer: A
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Refer to the figure above. The labor market is currently at point E. Which of the following is likely to happen if a recession hits the economy assuming that wages are flexible?
A) The labor market equilibrium will move from E to H. B) The labor market equilibrium will move from E to D. C) The labor market equilibrium will move from E to F. D) The labor market equilibrium will move from E to G.
The long-run average cost curve of a natural monopoly
A) is positively sloped until it crosses the demand curve. B) intersects the demand curve while it is negative sloped. C) intersects the demand curve while it is positively sloped. D) is the natural monopoly's supply curve. E) is the same as the natural monopoly's demand curve.
What is the difference between a program budget and a line-item budget? Is one more valuable to evaluating the effectiveness of government expenditures? Why?
What will be an ideal response?
The size of the bond dealer's spread is mainly a function of the:
A. face value of the bond. B. purchase price of the bond. C. liquidity of the bond market. D. current yield.