Suppose the government has imposed a price floor on cellular phones. Which of the following events could transform the price floor from one that is binding to one that is not binding?
a. Cellular phones become less popular.
b. Traditional land line phones become more expensive.
c. The components used to produce cellular phones become less expensive.
d. Firms expect the price of cellular phones to fall in the future.
b
You might also like to view...
The demand curve facing Company ABC is perfectly elastic. What is its marginal revenue?
a. Equal to the average revenue. b. Less than the price. c. Higher than the price. d. Higher than the average revenue.
According to the textbook application, the International Organization for Standardization (ISO)has developed standards for environmental management. Identified as
a. ISO 1500 c. ISO 1400 b. ISO 15000 d. ISO 14000
According to the classical model, an increase in the money supply causes
a. output to increase in the long run. b. the unemployment rate to fall in the long run. c. prices to rise in the long run. d. interest rates to fall in the long run.
Suppose Caesar allocates his entire budget to the purchase of soft drinks and chips. The marginal utility of the last bottle of soft drink purchased is 12 utils, and each bottle costs $1.20. The marginal utility of the last bag of chips purchased is 8 utils, and each bag costs $1. In order to maximize his utility, Caesar should
A. Buy more soft drinks and fewer chips because the soft drink has fewer calories. B. Buy more chips and fewer soft drinks because of the lower price for chips. C. Not change anything because he has made the choice that gives him the most total utility. D. Buy more soft drinks and fewer chips since he gets more marginal utility per dollar from soft drinks.