If the market price of gasoline were $4 a gallon and a ceiling price of $1.50 is imposed,
a. a surplus of gasoline occurs.
b. a shortage of gasoline occurs.
c. the price of gasoline would remain unchanged.
d. the price of gasoline would increase.
b. a shortage of gasoline occurs.
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The economic efficiency approach to emission control provides the polluting firm with
a. a license produce as much emissions as it wants b. the option of choosing between focusing on profit or cost c. a process for determining the optimum quantity of emissions d. more flexibility in selecting the most cost effective method of control e. a subsidy for producing additional emissions
If a country has a comparative advantage in the production of all goods, it should:
a. specialize in the production of goods with the lowest opportunity cost. b. specialize in the production of goods with the highest opportunity cost. c. specialize in the production of goods with the absolute advantage. d. specialize in the production of goods without the absolute advantage. e. not specialize at all and produce all the goods itself.
Which statement is false?
A. Induced consumption is never negative. B. Autonomous consumption is constant. C. When C is positive, saving is negative. D. When consumption is smaller than disposable income, saving is positive.
A for-profit company that buys real capital and leases it to a non-profit company can
A. charge a higher than market price to the non-profit company. B. offer the capital at a lease rate higher than it would cost the non-profit to buy the capital itself. C. add a net gain to the economy because one or both companies gain and no one loses. D. depreciate the leased capital to lower the firm's tax liability.