The table above gives the supply and demand schedules for scooters. Because of increased injuries sustained by children riding scooters, Citizens Against Scooter Accidents successfully lobbies the government to impose a price floor of $80
00 on scooters. a) What is the quantity demanded and supplied after the price floor has been imposed? b) Is there any shortage or surplus at this price floor? If so, how much? c) If the price floor is raised to $110.00, what is the quantity demanded and supplied? d) At a price floor of $110.00, is there any shortage or surplus? If so, how much?
a) The quantity demanded and supplied is 100 scooters at $90, the equilibrium price. Because the price floor, which is the legal minimum price, is below the equilibrium price, it has no effect. The price stays at the equilibrium price of $90 per scooter and the quantity remains at the equilibrium quantity of 100 scooters.
b) There is no surplus or shortage at a price floor of $90 per scooter.
c) The quantity demanded at $110 is 80 scooters and quantity supplied is 140.
d) There is a surplus. The surplus equals the quantity supplied, 140 scooters, minus the quantity demanded, 80 scooters, or a 60 scooters per week surplus.
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A) increases in price level. B) increases in output and price level. C) decreases in output and price level. D) decreases in output.
An interest rate spread is
A) the difference between long-term and short-term interest rates. B) the difference between nominal and real interest rates. C) the difference between lending and borrowing interest rates. D) the difference between public and commercial interest rates.
Only the federal government can create money.
Answer the following statement true (T) or false (F)
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A) a normal good. B) an inferior good. C) a complementary good. D) a substitute good.