f the government imposes a price floor of $6 on this market, then there will be
A. a surplus of 20 units.
B. a surplus of 30 units.
C. no surplus.
D. a surplus of 40 units.
C. no surplus.
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The crowding out of private spending by government spending will be greater the
A) less sensitive consumption, investment, and net exports are to changes in the price level. B) less sensitive consumption, investment, and net exports are to changes in interest rates. C) more sensitive consumption, investment, and net exports are to changes in interest rates. D) more sensitive consumption, investment, and net exports are to changes in the price level.
If the Federal Reserve announces that its target for the federal funds rate is rising from 4 percent to 4.25 percent, how do you expect workers and firms to react?
A) If the Fed's announcement is not credible, workers and firms will not expect inflation to fall so they will reduce their consumption and investment spending, which will increase aggregate demand and reduce inflation. B) As long as the Fed's announcement is credible, workers and firms will reduce their consumption and investment spending, which will reduce aggregate demand and reduce inflation. C) As long as the Fed's announcement is credible, workers and firms will increase their consumption and investment spending, which will increase aggregate demand and inflation. D) Workers and firms will incorporate the increase in interest rates into their expectations of inflation, and they will expect inflation to rise as a result of Fed's policy announcement.
A price floor set above the equilibrium price is binding
a. True b. False Indicate whether the statement is true or false
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Exhibit 8-3 Demand and cost curves for GeneTech, a monopolist with a patented vaccine
In Exhibit 8-3, what is the maximum hourly profit that GeneTech can earn from its vaccine?
A. $1,500. B. $3,000. C. $4,500. D. $10,500.