Assume a price floor is imposed at the current equilibrium price in the market for lettuce. If the demand for lettuce then increases:
a. a surplus of lettuce will be created
b. a shortage of lettuce will be created.
c. the quantity of lettuce traded remains the same.
d. the quantity of lettuce supplied will increase.
d
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The price elasticity of demand is equal to the slope of the demand curve
a. True b. False
Which of the following is a similarity between an oligopoly and a monopoly? a. Both oligopoly and monopoly have significant barriers to entry. b. Both oligopoly and monopoly have differentiated products
c. Both oligopoly and monopoly are characterized by mutually interdependent decision making. d. In both oligopoly and monopoly, the entire output is supplied by one dominant firm.
Much of the nation's coal is extracted by strip mining. This process leaves a huge barren hole in the ground when complete, and the cost of replanting the trees is approximately $10 per ton of coal. Burning the coal for electricity causes air pollution. No one knows how much damage the air pollution causes, but we know that for another $10 per ton the power plant can be outfitted with a pollution control device. What is one measure of the true social cost of coal fired electricity, in dollars per ton?
A. Private marginal cost plus the $10 replanting charge. B. Private marginal cost plus the $10 emission control charge. C. Only the $20 of replanting and emission control charges, because the other costs are private, not social. D. Private marginal cost plus the $20 of replanting and emission control charges.
Since all costs are positive, then economic profit would always be smaller than accounting profit.
Answer the following statement true (T) or false (F)