Refer to the accompanying figure, which shows the market for cups of coffee. Consider the original supply and the original demand curve. If the government imposes a price ceiling of $1.00 on a cup of coffee, then there would be:
A. a short-term excess demand for coffee, followed by an increase in the equilibrium price.
B. an excess supply of coffee.
C. a new equilibrium at a price of $1.00 per cup and a quantity of 50 cups per hour.
D. an excess demand for coffee.
Answer: D
You might also like to view...
The Glass-Steagall Act
A) was passed in response to the financial crisis of 2007-2009. B) requires that CEO's personally certify the accuracy of financial statements. C) prevented financial firms from being both commercial banks and investment banks. D) all of the above
The largest overall recipients of remittances are:
A. Chile and Mexico, which each get more than $50 billion per year. B. China and India, which each get more than $5 billion per year. C. China and India, which each get more than $50 billion per year. D. Chile and Mexico, which each get more than $5 billion per year.
Refer to the figure below.
When the market is unregulated, producer surplus is represented by the area:
A. ABC B. FHC C. DGF D. DBC
A firm that maximizes profits also
A) is inefficient. B) cuts corners in production processes so that its products are made too cheaply. C) uses the least-cost combination of resources. D) pays input prices lower than other firms do.