Price ceilings and price floors that are binding
a. are desirable because they make markets more efficient and more fair.
b. cause surpluses and shortages to persist because price cannot adjust to the market equilibrium price.
c. can have the effect of restoring a market to equilibrium.
d. are imposed because they can make the poor in the economy better off without causing adverse effects.
b
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Suppose that when disposable income increases by $2,000, consumption spending increases by $1,500. Given this information, we know that the marginal propensity to consume (MPC) is
A) .25. B) .75. C) $1,000/$750 = 1.33. D) 1/.25 = 4.
The nominal value of any economic statistic refers to the number that is actually announced at that time, while the ________________ refers to the statistic after it has been adjusted for inflation.
Fill in the blank(s) with the appropriate word(s)
With respect to consuming food and shelter, two consumers face the same prices and both claim to be in equilibrium. We therefore know that
A) they both have the same marginal utility for food. B) they both have the same marginal utility for shelter. C) they both have the same MRS of food for shelter. D) All of the above.
Curve tracing the utility maximizing combinations of two goods as the price of one good changes.