Suppose the government wants to encourage Americans to exercise more, so it imposes a binding price ceiling on the market for in-home treadmills. As a result,
a. the demand for treadmills will increase.
b. the supply of treadmills will decrease.
c. a shortage of treadmills will develop.
d. All of the above are correct.
c
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If price is between AVC and ATC, the best and most practical thing for a perfectly competitive firm to do is
A) raise prices. B) lower prices to gain revenue from extra volume. C) shut down immediately, but not liquidate the business. D) shut down immediately and liquidate the business. E) continue operating, but plan to go out of business.
According to Gordon, for which of the following should policymakers set a target rate of zero?
A) productivity growth B) inflation rate C) unemployment rate D) None of the above
Refer to Figure 2.1. At point E, demand is:
A) completely inelastic. B) inelastic, but not completely inelastic. C) unit elastic. D) elastic, but not infinitely elastic. E) infinitely elastic.
A congress member concerned about ensuring vertical equity in taxation would be most likely to argue for obtaining government revenue through a
A. progressive tax on personal income. B. regressive tax on corporate income. C. sales tax. D. head tax.