When the government restricts the quantity of a good to zero
A) an underground market develops.
B) there is none of the good available anywhere.
C) people's demand for the product evaporates.
D) producers stop all production.
Answer: A
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Goods that are produced this year, stored in inventories, and then sold to consumers next year
A) count in this year's GDP. B) count in next year's GDP. C) count in both this year's and next year's GDP. D) are not counted as a part of GDP.
Which of the following is a reserve target specified in the FOMC directive?
A) Bank reserves B) Commercial bank capital requirements C) Demand deposits D) The prime rate
A seller with market power has greater command over product price compared to a perfect competitor and is thus less enthusiastic in devising new ways to create economic value
Indicate whether the statement is true or false
If the Consumer Price Index (CPI) increases from 100 to 200 and the nominal wage increases from $100 to $400, what is the change in the real wage in terms of the beginning year's dollars?
a. +$200 b. +$400 c. +$100 d. +$300 e. -$200