A price ceiling is binding when
a. the government sets price above market equilibrium price.
b. the equivalent of an implicit tax on producers and an implicit subsidy to consumers.
c. the government sets price below market equilibrium price.
d. Both b and c.
b
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A falling interest rate ________ the number of investment projects having a positive profit rate, and thus ________ the amount of output that firms demand for themselves
A) increases, raises B) increases, lowers C) decreases, raises D) decreases, lower
If demand for a product is price elastic, the absolute value of the price elasticity coefficient is _________
Fill in the blank(s) with the appropriate word(s).
If, after careful analysis, an economist concludes that there has been a market failure, which of the following possible corrective actions might the economist favor? Why? a. prohibiting the activity b. charging fees for continuing the activity c. requiring that the public be informed of the activity d. government purchase of the item for the public
What will be an ideal response?
Because a government budget deficit represents
a. negative public saving, it increases national saving. b. negative public saving, it decreases national saving. c. positive public saving, it increases national saving. d. positive public saving, it decreases national saving.