How is a preset price similar to a government-imposed price ceiling or a price floor? How is a preset price different from a government-imposed price ceiling or price floor?
Please provide the best answer for the statement.
A preset price is a predetermined price that is set by a business before sales occur. When a preset price is set below the equilibrium price, a shortage will result. This situation is similar to when a government imposes a price ceiling below the equilibrium price. When a preset price is set above the equilibrium price, a surplus can result. This situation is similar to when the government imposes a price floor above the equilibrium price. Although the outcomes are the same, businesses establish a preset price and government establishes a legal price.
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The demand for a good with many substitutes is: a. relatively elastic
b. relatively inelastic. c. perfectly inelastic. d. unit elastic.
College graduates earn much more than grade school dropouts mainly because
A. the college graduate is older. B. the college graduate has learned more. C. the college graduate is probably smarter, richer, more motivated, has better connections, and comes from a more supportive learning environment. D. the college graduate is more likely to have grown up in a large city, and to be more cosmopolitan.
As price decreases along a downsloping linear demand curve, price elasticity of demand decreases.
Answer the following statement true (T) or false (F)
Increases in the capital stock: a. Shift the short run aggregate supply curve to the right
b. Shift the long run aggregate supply curve to the right. c. Shift both short run and long run aggregate supply curves to the right. d. Do none of the above