Suppose the equilibrium price of a physical examination ("physical") by a doctor is $200, and the government imposes a price ceiling of $150 per physical. As a result of the price ceiling,
a. the demand curve for physicals shifts to the right.
b. the supply curve for physicals shifts to the left.
c. the quantity demanded of physicals increases and the quantity supplied of physicals decreases.
d. the number of physicals performed stays the same.
Answer: c. the quantity demanded of physicals increases and the quantity supplied of physicals decreases.
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Exhibit 5-5 Gross domestic product data National income accountBillions ofdollars Depreciation$ 500 Net interest 2,000 Compensation of employees 6,000 Profits 1,500 Rental income 200 Indirect business taxes 800 Net exports 1,000 As shown in Exhibit 5-5, using the income approach, gross domestic product (GDP) is:
A. $8,000 billion. B. $8,800 billion. C. $9,400 billion. D. $11,000 billion.
(Advanced analysis) In a private closed economy, (a) the marginal propensity to save is 0.25, (b) consumption equals income at $120 billion, and (c) the level of investment is $40 billion. What is the equilibrium level of income?
A. $280 billion. B. $320 billion. C. $262 billion. D. $198 billion.
The market in which households, firms and governments buy and sell national currencies is known as
A. flexible exchange rates. B. the foreign exchange market. C. standard drawing rights. D. the exchange rate.
Which of the following is a microeconomic question?
A) How much will be saved and how much will be produced in the entire economy? B) What will the level of economic growth be in the entire economy? C) What factors determine the price of carrots? D) What determines the average price level and inflation?