A binding price floor creates
a. deadweight loss.
b. consumer surplus.
c. producer surplus.
d. deadweight gain.
a. deadweight loss.
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When the central bank buys $1,000,000 worth of government bonds from the public, the money supply:
A. increases by $1,000,000. B. decreases by $1,000,000. C. increases by less than $1,000,000. D. increases by more than $1,000,000.
Describe the characteristics of an oligopoly
What will be an ideal response?
Jason, a high-school student, mows lawns for families in his neighborhood. The going rate is $12 for each lawn-mowing service
Jason would like to charge $20 because he believes he has more experience mowing lawns than the many other teenagers who also offer the same service. If the market for lawn mowing services is perfectly competitive, what would happen if Jason raised his price? A) If Jason raises his price he would lose all his customers. B) He would lose some but not all his customers. C) Initially, his customers might complain but over time they will come to accept the new rate. D) If Jason raises his price, then all others supplying the same service will also raise their prices.
The balanced budget multiplier is always equal to:
A. 0.50. B. 0.75. C. 1 / MPC. D. 1.