When a government increases an effective price ceiling for a product
A. the surplus in the market will be reduced.
B. the shortage in the market will be reduced.
C. the shortage in the market will be increased.
D. the surplus in the market will increase.
Answer: B
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In a perfectly competitive market, an increase in market demand
A) raises the price in the short run and attracts new firms in the long run. B) raises the price in the short run and the long run. C) lowers the price in the short run and in the long run. D) has no effect on the price in either the short run or the long run because the firms are price takers.
The relative poverty line defines poverty:
A. as the price of basic food, clothing, shelter and utilities, and adjusts for geographic differences in the cost of living. B. based on the expenditure on food relative to total income. C. in relation to the income of the rest of the population. D. None of these is true.
A firm’s fixed costs are $10 million. It sets the price at $1800 per unit and has marginal costs of $1,000. What is the firm’s contribution margin?
a. ?$800 b. ?$300 c. ?$1800 d. ?$1000
Pollution is caused by a market failure, in an industry in which there is
A) unemployment. B) an over-allocation of resources in production. C) excess demand. D) excessive cost borne by the firm.