When the government imposes a price ceiling on a good whose price is too high,
a. an excess supply is created
b. supply will increase to meet the demand
c. the price ceiling becomes the rationing mechanism
d. quantity demanded of the good will fall
e. a shortage will arise
E
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The U.S. factor of production that is most likely to be made worse off because of NAFTA (because its factor payment will fall) is
A) unskilled labor. B) skilled labor C) capital D) All of the above will be made worse off.
Suppose an increase in symphony tickets prices reduces the total revenue. This is evidence that demand is:
a. price elastic. b. price inelastic. c. unitary elastic. d. perfectly elastic.
Perfectly competitive markets are characterized by: a. rivalry in product design
b. competition in terms of product quality. c. attempts by sellers to outdo one another with good service. d. none of the above.
To maximize profit, a monopolist should produce the level of output at which
a. price equals marginal cost b. price equals marginal revenue and marginal cost c. price equals marginal revenue d. marginal revenue equals marginal cost e. price equals average total cost