The problems created by price controls become greatest as time goes by when:
A. demand becomes more in elastic and supply becomes more elastic.
B. demand and supply become more inelastic.
C. demand and supply become more elastic.
D. supply becomes more inelastic and demand becomes more elastic.
Answer: C
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The cost of producing cigarettes in the United States has increased and at the same time, more and more Americans are choosing to not smoke cigarettes. Which of the following best explains the effect of these events in the cigarette market?
A) Both the supply and demand curves have shifted to the left. As a result, there has been a decrease in the equilibrium quantity and an uncertain effect on the equilibrium price. B) Both the supply and demand curves have shifted to the right. As a result, there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price. C) The supply curve has shifted to the right and the demand curve has shifted to the left. As a result there has been an increase in the equilibrium quantity and an uncertain effect on the equilibrium price. D) The supply curve has shifted to the right and the demand curve has shifted to the left. As a result, there has been an increase in the equilibrium price and an uncertain effect on the equilibrium quantity.
The supply curve for bonds would be shifted to the right by
A) a decrease in expected profitability. B) a decrease in the corporate tax on profits. C) a decrease in tax subsidies for investment. D) a decrease in government borrowing.
The corporate income tax is the single largest source of revenue for the federal government
a. True b. False Indicate whether the statement is true or false
The three reasons why the aggregate demand curve slopes downward are
a. the international substitution effect, the net exports effect and the interest rate effect. b. the interest rate effect, the short run effect and the free rider effect c. the net exports effect, the real balance effect and the short run effect d. the real balance effect, the international substitution effect and the interest rate effect.