Holding all other forces constant, if increasing the price of a good leads to an increase in total revenue, then the demand for the good must be
a. unit elastic.
b. inelastic.
c. elastic.
d. None of the above is correct because a price increase always leads to an increase in total revenue.
b
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Which of the following is not an example of a price ceiling?
a. The Chinese government sets the price of housing in China below equilibrium. b. The government of the former Soviet Union sets the price on food below those prevailing in the free market. c. In the 1970s, the Nixon administration imposed wage and price controls, thereby keeping wages and prices from rising. d. In the late 1970s, the U.S. government required gasoline to be sold at a price per gallon that was below what would have prevailed in a free market. e. The U.S. government requires that sugar be sold at a price that exceeds the world price of sugar.
Direct controls have traditionally been used heavily to control pollution in the U.S
a. True b. False Indicate whether the statement is true or false
The main objective of the members of a cartel is to
A) earn economic profits. B) produce efficiently. C) make the industry more competitive. D) obtain a patent.
Refer to the graph below. Assume that the economy is initially at full-employment equilibrium at point A. If there is cost-push inflation in this economy and the government pursues an expansionary fiscal policy, then in the long run the:
A. Price level will rise from P1 to P2 and real output will be Q2
B. Price level will rise from P1 to P3 and real output will be Q1
C. Price level will rise from P1 to P2 and real output will be Q3
D. Price level will be P1 and real output will be Q1