Price ceilings are imposed if the government believes:
a. the market will not achieve an equilibrium price.
b. the market equilibrium price is too low.
c. an excess supply of the product exists.
d. the market equilibrium price is too high.
e. the demand will be less than the supply of the product.
Ans: d. the market equilibrium price is too high.
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An increase in the unemployment rate from 15 percent to 20 percent might be illustrated as: a. a movement up and to the left from one point along the production possibilities curve to another. b. a movement from a point on the production possibilities curve to an interior point
c. a movement from an interior point to a point on the production possibilities curve. d. a movement from a point inside the production possibilities curve to one closer to the origin.
A store is choosing between advertising a credit card fee or a discount for paying cash to its customers. People will care more about:
A. avoiding the fee rather than getting the discount. B. neither; since it's the same outcome, people won't care one way or another. C. getting the discount rather than avoiding the fee. D. It is impossible to say without more information.
Refer to the figure below. In this case, the private market ________ resources efficiently because ________.
A. does not allocate; some of the costs of paper production do not fall on producers B. does not allocate; demand and supply do not cross at the market equilibrium C. allocates; consumers are willing to pay the external cost of production D. allocates; firms are motivated to maximize profit
The Congressional Budget Office estimates that ________ of the increase in federal spending on Medicare and Medicaid over the next 75 years will be due to increases in the cost of providing health care
A) very little B) less than half C) most D) all