Governments sometime create an excess demand for a product by setting a maximum price that is less than the equilibrium price, resulting in a permanent excess demand for the product. This is known as a price floor
Indicate whether the statement is true or false
FALSE
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The danger in using data to estimate the consequences of a proposed policy is that ________
A) the data can reveal only the benefits of a policy, while estimating the policy's costs is important, also B) policies change so often that data can never reveal which policies are the cause of which consequences C) the public's expectations about the policy might influence the data, making the policy seem more or less appropriate than is actually the case D) the proposed policy, if implemented, might cause unforeseeable changes in the relationships that were in operation when the data were produced
The number of computers bought increased by 20 percent when the price of on-line services declined by 10 percent. Assuming other factors are held constant, computers and on-line services are classified as:
a. complements. b. unrelated goods. c. substitutes. d. social goods.
In 2006, Jan and Lou bought a house for $100,000. After a year, they still owed $98,000, but the home was worth $220,000, so they used it as collateral to get a $90,000 loan to buy a boat. What have they done?
a. taken out a hybrid loan b. bought a mortgage-backed security c. borrowed against their equity d. entered a subprime mortgage
Which of the following is not a basic characteristic of monopolistic competition?
A. The use of trademarks and brand names. B. Recognized mutual interdependence. C. Product differentiation. D. A relatively large number of sellers.