Suppose the market supply is initially at S1 and a price ceiling is set at 8. If supply shifts from S1 to S2, then
A. The price ceiling will no longer bind.
B. The price ceiling will prevent output from changing.
C. The size of the shortage will increase.
D. The market will not reach equilibrium.
A. The price ceiling will no longer bind.
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A firm in monopolistic competition has some degree of price-setting power because
A) in the long run it earns a normal profit. B) it can never earn less than normal profit. C) the price it charges is never more than its marginal cost. D) if it raises its price, the quantity it can sell will not decrease to zero.
The World Bank sorts countries into the following three major groups:
a. high-income economies, middle-income economies, low-spending economies b. high-spending economies, middle-spending economies, low-spending economies c. super-high-income economies, middle-income economies, low-income economies d. high-income economies, middle-income economies, zero-income economies e. high-income economies, middle-income economies, low-income economies
The table below shows the number of labor hours required to produce one umbrella and one bushel of corn in the United Kingdom and the rest of the world. The rest of the world has an absolute advantage in the production of Labor hours to make:In the United KingdomIn the Rest of the World1 umbrella3.002.001 bushel of corn1.000.25
A. only umbrellas. B. neither corn nor umbrellas. C. only corn. D. both corn and umbrellas.
Which of the following was not a factor that contributed to the subprime mortgage crisis?
A. False security derived from FDIC insurance on mortgage loans B. Lower down payments C. Households devoting 25 percent or more of their income to mortgage payments D. Lending to households with adverse credit ratings