List some of the problems that may arise when prices are controlled
Apart from the standard set of issues associated with price ceilings and floors, following are some of the problems arising out of price controls:
Favoritism and corruption
Unenforceability
Auxiliary restrictions
Limitation of volume of transactions
Misallocation of resources
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Last year, 1,000 cases of cough syrup were sold at $10; this year, 1,200 cases were sold at $12. The most probable interpretation of these data is that the
A. supply and demand curves are shifting to the right. B. supply and demand curves are shifting to the left. C. supply curve has shifted to the left, with no change in demand. D. demand curve has shifted to the right, with no change in supply.
When the interest rate is above the equilibrium interest rate, there is an excess ________ money and the interest rate will ________
A) demand for; rise B) demand for; fall C) supply of; fall D) supply of; rise
You lose your job and, as a result, you buy fewer iTunes music downloads. This shows that you consider iTunes music downloads to be a(n) a. luxury good
b. inferior good. c. normal good. d. complementary good.
Refer to Figure 4-3. Kendra's marginal benefit from consuming the first ice cream cone is
A) $9.00. B) $7.50. C) $3.50. D) $0.50.