If the government set a price ceiling of 25 cents for a loaf of bread, the most likely consequence would be
A. a surplus of bread.
B. no one would go hungry.
C. most Americans would put on weight.
D. a shortage of bread.
D. a shortage of bread.
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If the price level is 100 in one year and rises to 102 the next year, then the inflation rate is
A) 0.02 percent. B) 100 percent. C) 102 percent. D) 2.0 percent. E) unable to be determined without knowing potential GDP.
On the graph above, what area represents consumer surplus when the price is $10?
A. A B. B C. C D. A and B E. B and C
A special license is required to operate a taxi in many cities. The number of licenses is restricted. More drivers want licenses than are issued. This describes a non-perfectly competitive market because
A) taxi services are very different. B) firms cannot freely enter and exit the market. C) transaction costs are high. D) the government generates revenue from the licenses.
The economist who recognized that lags in policy can explain the difficulty in conducting monetary policy was
A) Adam Smith. B) John Nash. C) Milton Friedman. D) Joseph Schumpeter.