According to the above figure, a shortage will occur at a price at which
A. quantity supplied exceeds quantity demanded.
B. government sets a price above equilibrium.
C. quantity demanded exceeds quantity supplied.
D. quantity demanded equals quantity supplied.
Answer: C
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In the above figure, a rent ceiling of $300 per month would
A) not affect the equilibrium quantity. B) result in a surplus of 7000 units. C) result in a shortage of 7000 units. D) result in a shortage of 2000 units.
If the government makes a good illegal and then imposes stiffer penalties on illegal drug buyers than on sellers, the price of the good ________ and the quantity ________
A) falls; increases B) rises; decreases C) falls; decreases D) does not change; decreases
Suppose the equilibrium real federal funds rate is 3 percent, the target rate of inflation is 3 percent, the current inflation rate is 1 percent, and real GDP is 8 percent below potential real GDP
If the weights for the inflation gap and the output gap are both 1/2, then according to the Taylor rule the federal funds target rate equals A) -3 percent. B) -1 percent. C) 3.5 percent. D) 7 percent.
Graphically, the effects of an external cost can be shown as
A) a leftward shift of the market demand curve. B) a leftward shift of the market supply curve. C) a downward movement along the market demand curve. D) a rightward shift of the market supply curve.