A price floor that is set above market equilibrium will cause
A) an excess quantity demanded.
B) a shortage.
C) a surplus.
D) queuing on the part of consumers.
C
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If a cartel is unable to monitor its members and punish those firms that violate the agreement, then
A) the member firms will each act as price setters. B) the cartel will prosper in the long run. C) the market will become a monopoly. D) the cartel will fail.
A supply curve slopes upward because a. as more is produced, total cost of production falls
b. many firms will experience increases in their costs of production as their output rises so they need a higher price in order to induce them to produce more output. c. the higher the price per unit, the greater the profitability generated by supplying more of that good. d. both (b) and (c).
If Ana devotes all her time to making fudge, she can make 3 pounds of fudge an hour, and if she devotes all her time to making toffee, she can make 2 pounds of toffee an hour. If Leo devotes all his time to making fudge, he can make 4 pounds of fudge an hour, and if he devotes all his time to making toffee, he can make 5 pounds of toffee an hour. According to The Principle of Comparative Advantage, Ana and Leo will be able to produce more overall if:
A. Ana specializes in fudge and Leo specializes in toffee. B. the Principle of Comparative Advantage does not hold in this example. C. Leo specializes in fudge and Ana specializes in toffee. D. both Leo and Ana specialize in fudge.
Exhibit 1A-8 Straight line relationship
Which of the following would cause a shift in the relationship shown in Exhibit 1A-8?
A. A fall in household incomes. B. A fall in the price of pizza. C. A fall in the quantity of pizza that people wish to purchase. D. A rise in the price of pizza.