The demand for steel has decreased in July without any change in supply. Six months later there still has been no change in steel prices. This is an example of a
A. macroeconomic price.
B. price control.
C. sticky price.
D. price floor.
Answer: C
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Producers were accused of price gouging as the price of bottled water soared after Hurricane Andrew. Consumers clamored for price controls to keep bottled water at pre-Andrew levels. Use supply and demand analysis to graphically show the effect of setting a price ceiling on bottled water after Hurricane Andrew at the pre-hurricane equilibrium price. Use your graph to assist in explaining the likely unintended effects of such a price control. Be sure that your graph is completely and correctly labeled.
What will be an ideal response?
A budget line is drawn with automobiles on the vertical axis and boats on the horizontal. Imposing a tax on boats that boosts the price of a boat makes the
A) indifference curves flatter. B) indifference curves steeper. C) budget line flatter. D) budget line steeper.
The concept of utility maximization:
A. is solely used to measure an individual's satisfaction with his consumption choices. B. can be used broadly to think about choices made motivated by satisfaction, envy, status, or kindness. C. assumes each individual seeks to increase his own personal satisfaction regardless of others. D. None of these is true.
An unregulated market economy provides material wealth, but does not generate effective control of environmental damage
a. True b. False Indicate whether the statement is true or false