Suppose the government has imposed a price ceiling on laptop computers. Which of the following events could transform the price ceiling from one that is not binding into one that is binding?
a. Improvements in production technology reduce the costs of producing laptop computers.
b. The number of firms selling laptop computers decreases.
c. Consumers' income decreases, and laptop computers are a normal good.
d. The number of consumers buying laptop computers decreases.
b
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Diminishing returns to capital is a consequence of firms' incentives to use each piece of capital as productively as possible and illustrates the:
A. cost-benefit principle. B. principle of comparative advantage. C. principle of increasing opportunity costs. D. scarcity principle.
Why might high levels of spending on education in a developing country not be associated with development success?
What will be an ideal response?
Let supply be given by Q = -7.5 + 0.5P and demand by Q = 10 - 0.2P. What will be the equilibrium price in this market?
A. 10 B. 20 C. 25 D. 5
A $1,000 bond, which matures in one year, has a price of $925. The interest rate on this bond is
A) 7.5%. B) 8.11%. C) 9.25%. D) 9.20%.