If the federal government sets a minimum price for wheat at $5.00 per bushel when the equilibrium price is $4.50, then
A) a surplus will be created causing the price to fall to the equilibrium price of $4.50.
B) a permanent surplus will develop because the government established the minimum price at $5.00.
C) a shortage will be created causing the price to rise to the equilibrium price of $4.50.
D) a permanent shortage will develop because the government established the minimum price at $5.00.
B
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
Which of the following is true of sub-Saharan Africa?
What will be an ideal response?
If MUx/Px exceeds MUy/Py, then a household can increase its utility by spending more on Y and less on X.
Answer the following statement true (T) or false (F)
A constant returns to scale production function means that if all inputs are halved then output will
a. double. b. increase, but not double. c. fall by half. d. fall, but not by half. e. none of the above.