Explain the impact of: 1 . A rent ceiling set below the equilibrium price. 2 . A price floor set above the equilibrium price
A rent ceiling set below the equilibrium price results in a persistent shortage. A price floor set above the equilibrium price will result in a surplus.
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Unemployment compensation programs are called automatic stabilizers because payments increase during
A) expansionary periods. B) recessions. C) both recessions and expansions. D) wartime only.
The rate at which one input can be substituted for another is shown by:
A. the slope of a firm's production function. B. the slope of a firm's efficient production frontier. D. the shape of a firm's production function.
Marginal cost increases as the quantity of output increases. This reflects the property of
a. increasing total cost. b. diminishing total cost. c. increasing marginal product. d. diminishing marginal product.
The Cost-Benefit Principle indicates that an action should be taken if:
A. its average benefits exceed its average costs. B. its net benefit (benefit minus cost) is zero. C. its extra benefit is greater than or equal to its extra cost. D. its total benefits exceed its total costs.