Refer to the information provided in Table 3.1 below to answer the question(s) that follow.
Table 3.1Price per PizzaQuantity Demanded (Pizzas per Month)Quantity Supplied (Pizzas per Month)$31,200 600 61,000 700 9 800 80012 600 90015 4001,000Refer to Table 3.1. In this market there will be an excess demand of 300 pizzas at a price of
A. $6.
B. $9.
C. $12.
D. $15.
Answer: A
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When the government implements a price support program:
A. it may end up buying a lot of the good, for which it has little or no use. B. the goal is to increase the market price of the good. C. the deadweight loss created can be larger than that created by a price floor. D. All of these occur as a result of a price support program.
Why do permanent tax cuts have a greater impact on consumption than temporary tax cuts?
a. Permanent tax cuts have a greater effect on expected long-run inflation. b. Permanent tax cuts are perceived as minor while temporary tax cuts are larger and more effective. c. Permanent tax cuts cause movement along the consumption function, while temporary tax cuts shift the consumption function. d. Permanent tax cuts affect expectations of long-run income more than temporary tax cuts.
Deadweight losses arise because a tax causes some individuals to change their behavior
a. True b. False Indicate whether the statement is true or false
Capital goods are
A. goods used to produce other goods. B. used up in the same period that they are produced. C. not used to produce other goods. D. not counted in GDP as final goods.