A maximum legal price that may be charged for a particular good or service is known as a
A. black market.
B. price ceiling.
C. price floor.
D. price support.
Answer: B
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Refer to the graph shown. There is a $.010 per-gallon marginal cost external to the trade associated with the use of gasoline. Assuming that gasoline is sold in perfectly competitive markets, the market equilibrium price will be:
A. $1.10. B. $1.05. C. $1.00. D. $0.95.
If marginal cost is increasing, average total cost must be increasing
Indicate whether the statement is true or false
An increase in aggregate demand, such as that due to an increase in government purchases, increases:
a. prices in the short run and output in the long. b. output in the short run and prices in the long run. c. both output and prices in the long run. d. output in the long run.
Aggregate demand and aggregate supply must be combined to determine the price level and the "real" GDP.
Answer the following statement true (T) or false (F)