If the government set a price floor at $8
A. there would be a temporary surplus, then prices would fall to equilibrium.
B. there would be a permanent surplus, at least until the price floor was lifted.
C. the price would rise back to the equilibrium price.
D. the price floor would not have any effect on this market.
B. there would be a permanent surplus, at least until the price floor was lifted.
You might also like to view...
Refer to Figure 9.1. Assume the economy is initially at point A
Following the initial change in short-run equilibrium resulting from a recession caused by an increase in oil prices, the end of the recession is best represented by which long-run equilibrium combination of price level and real GDP? A) P1; Y1 B) P3; Y3 C) P1; Y3 D) P3; Y1
If the price of a good is below the shutdown point, a perfectly competitive firm earns zero profits
a. True b. False Indicate whether the statement is true or false
A year-long drought that destroys most wheat crops for the season would shift the:
A. short-run aggregate supply curve only. B. aggregate demand curve only. C. aggregate demand curve, and the short-run aggregate supply curve would shift in response. D. short-run aggregate supply curve and the long-run aggregate supply curve.
A significant advantage to being a member of a trade bloc is
A) higher tariff collections from member countries. B) reduced or eliminated tariffs among member countries. C) reduced tariff rates only for the largest member countries. D) None of the above; there is no economic advantage to a trade bloc.