In a perfectly competitive industry, which of the following is true?
a. The competitive price is higher and quantity higher than the socially efficient point.
b. The competitive price is higher and quantity lower than the socially efficient point.
c. Since the industry is perfectly competitive, price and quantity are at the socially efficient levels.
d. The competitive price is lower and quantity higher than the socially efficient point.
d
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Big Alice Ice Cream Parlor reduced its price of an ice cream cone from $1 to 90 cents. Sales consequently increased from 1,000 cones per week to 1,050 cones per week. The approximate price elasticity is
A. 0.20. B. 0.46. C. 2.16. D. 5.00.
Pa and Pb represent the prices that citizens (a) and (b), the only two people in this nation, are willing to pay for additional units of a quantity (Qc) of the public good. Qs represents the quantity of the public good supplied by government at each of the collective prices.QcPaPbQs1$4$552344324342325121Refer to the above information. The collective willingness of this nation to pay for the fourth unit of the public good is:
A. $5. B. $7. C. $3. D. $6.
Governments sometime create an excess supply of a product by setting a minimum price that is greater than the equilibrium price, resulting in a permanent excess supply of the product. This is known as a price ceiling.
Answer the following statement true (T) or false (F)
The Federal Reserve finances its credit policy with
A. funding from the U.S. Treasury Department. B. reserve deposits that private banks hold with the Fed. C. borrowing from the federal government. D. the insurance premiums collected by the FDIC.