If the equilibrium price of bread is $2 and the government imposes a $1.50 price ceiling on the price of bread,
a. more bread will be produced to meet the increased demand
b. there will be an excess demand for bread
c. the demand for bread will decrease because suppliers will reduce their supply
d. an excess supply of bread will emerge
e. a $0.50 tax must be imposed to bring equilibrium price into accord with the price ceiling
B
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The principle that "as one input increases while the other inputs are held fixed, output increases at a decreasing rate" is known as the
A) marginal principle. B) principle of diminishing returns. C) principle of opportunity cost. D) spillover principle.
Joshua has decided that he will only purchase a one-year Treasury bill with a face value of $500,000 if he receives an interest rate of 6.25%. How much will Joshua end up paying for this Treasury bill?
A) $439,338 B) $468,750 C) $470,588 D) $531,250
Ricardian Equivalence theory is based on the view that ________
A) the impact of a tax cut is felt primarily on domestic consumption spending B) households tend to take future events into account when engaging in economic decision-making C) the price of a commodity is negatively related to the quantity of that good demanded D) a trade-off exists between the use of monetary and fiscal policy in influencing the level of income
To accomplish its purpose a linear profit-sharing contract must
a. induce the employee to moonlight b. communicate a code of conduct that will be monitored and enforced c. meet either the participation or the incentive compatibility constraint d. establish a separating equilibrium e. not realign incentives