If the price ceiling is set above the equilibrium price,
A. there will be a surplus.
B. there will be a shortage.
C. quantity demanded will equal quantity supplied.
D. demand will be less than supply.
C. quantity demanded will equal quantity supplied.
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If the number of firms in a monopolistically competitive industry increases and the degree of product differentiation diminishes
A. the industry would more closely approximate pure competition. B. the likelihood of realizing economic profits in the long run would be enhanced. C. the likelihood of collusive pricing would increase. D. individual firms would now be operating at outputs where their average total costs would be higher.
If a natural disaster were to cause a negative long-run supply shock to the economy, once the economy adjusts, the new equilibrium will be at a:
A. higher price level and lower level of output. B. lower price level and lower level of output. C. higher price level and higher level of output. D. lower price level and higher level of output.
Due to a mild winter, Florida experienced a bumper crop of oranges. This would best be represented by a(n)
A. movement down the U.S. production possibility frontier. B. outward shift of the U.S. production possibility frontier away from the origin. C. movement off the U.S. production possibility frontier to some point inside the frontier. D. movement up the U.S. production possibility frontier.
A decrease in net taxes will result in consumption crowding out planned investment when the economy is on the steep part of the AS curve.
Answer the following statement true (T) or false (F)