In order for a price ceiling to "bind," it:
A. must be set above the equilibrium price, and will likely cause a shortage.
B. must be set below the equilibrium price, and will likely cause a shortage.
C. must be set above the equilibrium price, and will likely cause a surplus.
D. must be set below the equilibrium price, and will likely cause a surplus.
B. must be set below the equilibrium price, and will likely cause a shortage.
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The existence of marginal social benefits which are not marginal benefits for the industry producing the import substitutes
A) is an argument supporting free trade and non-governmental involvement. B) is an argument supporting the use of an optimum tariff. C) is an argument supporting the use of market failures as a trade-policy strategy. D) is an argument rejecting free trade and supporting governmental involvement. E) is an argument rejecting the domestic market failure concept.
If Fast Prints has a contract with local couriers to deliver their products to customers located throughout the city, this is an example of ________.
A) outsourcing B) a market transaction C) forward integration D) backward integration
Proponents of monetary policy based on fixed rules base their position on the assumption of a vertical aggregate supply curve.
a. true b. false
If the production of ukuleles creates a negative externality that is NOT corrected for by the government, the equilibrium quantity of ukuleles is
A) higher than optimal. B) lower than optimal. C) efficient. D) at a optimal level.