Briefly explain how the lower prices of a price ceiling can actually hurt some consumers.
What will be an ideal response?
After the price ceiling is implemented, consumers can buy the good at a lower price but cannot buy as much as before. Some consumers are worse off because they have been rationed out of the market by the reduction in output.
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Figure 9.1 shows three aggregate demand curves. A movement from point b to point c could be caused by a(n)
A) decrease in government spending. B) decrease in the price level. C) decrease in taxes. D) increase in the money supply.
Which of the following is true at the point where diminishing returns set in?
a. Both marginal product and marginal cost are at a maximum. b. Both marginal product and marginal cost are at a minimum. c. Marginal product is at a maximum and marginal cost at a minimum. d. Marginal product is at a minimum and marginal cost at a maximum.
Average income for adults still varies widely across gender and racial groups in the United States, which tells us:
A. race and gender differences cause differences in income. B. discrimination causes differences in income across race and gender groups. C. income is correlated with race and gender. D. All of these are true.
Suppose Turkey increases its saving rate. In the long run
a. the growth rates of productivity and real GDP per person increase. b. productivity and real GDP per person increase. c. the growth rate of productivity increases, and real GDP per person increases. d. productivity increases, and the growth rate of real GDP per person increases.