Which of the following statements is not valid when the market supply curve is vertical?
a. Market quantity supplied does not change when the price changes.
b. Supply is perfectly inelastic.
c. An increase in market demand will increase the equilibrium quantity.
d. An increase in market demand will increase the equilibrium price.
c
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Regulatory capital arbitrage is a means of
A) using borrowed funds to increase the returns that can be earned with a given amount of capital. B) specifying the amount of capital that financial institutions should hold based on the riskiness of their different assets. C) determining mortgage rates for sub-prime borrowers. D) changing the composition of assets in such a way as to lower the overall amount of capital a financial institution holds for a given level of assets.
Marginal cost is defined as
A. the rate at which fixed cost changes with output. B. the rate at which total variable cost changes with output. C. total cost minus variable cost. D. the rate at which average cost changes with output.
The National Labor Relations (Wagner) Act prohibited employers from
A. coercion or interference with employees who are organizing or bargaining. B. refusing to bargain in good faith with a union legally representing employees. C. penalizing employees for union activity. D. All of these choices are correct.
Suppose the income tax rate is 0 percent on the first $10,000; 10 percent on the next $20,000; 20 percent on the next $20,000; 30 percent on the next $20,000; and 40 percent on all income above $70,000. Family A has income of $100,000 while Family B has income of $40,000. The marginal tax rates faced by the two families are
A) 40 percent on A and 10 percent on B. B) 40 percent on A and 20 percent on B. C) 30 percent on A and 20 percent on B. D) 30 percent on A and 30 percent on B.