In the market for eggs, a removal of the price ceiling on eggs results in:
a. an increase in the demand for eggs.
b. farmers supplying more eggs to the market.
c. consumers demanding a larger quantity of eggs.
d. farmers supplying less eggs to the market.
e. consumers demanding a smaller quantity of eggs.
b
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Each point on a production possibilities frontier represents an efficient allocation of resources in an economy at one point in time.
Answer the following statement true (T) or false (F)
A firm moves from one SRATC curve to another
a. when it changes the number of workers it employs b. when it has contractual obligations on its plant and equipment c. when it produces more output with the same plant size d. in the short run e. in the long run
If the firms in a competitive price-searcher market are suffering short-run losses, which of the following will occur in the long run?
a. New firms will enter the industry. b. Customers of firms that leave the industry will switch to remaining firms. c. Firms that remain in the industry will face reduced demand. d. Firms will continue to incur losses.
Under what circumstances does purchasing-power parity explain how exchange rates are determined, and why is it not completely accurate?