Concerned about the political fallout from rising gas prices, the US government decides to impose a price ceiling on gasoline of $3 a gallon. If the oil-producing nations increase production and drive the equilibrium price of gasoline to $3 a gallon, ______. The market for gasoline is _____.
Fill in the blank(s) with the appropriate word(s).
- Neither a surplus nor a shortage of gasoline emerges and a black market does not emerge
- Efficient
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Refer to Table 2-14. What is Scotland's opportunity cost of producing one guitar?
A) 0.25 motorcycles B) 4 motorcycles C) 12 motorcycles D) 16 motorcycles
Using the simple Keynesian model with a consumption function of C = 200 + .9Y, an $10 change in desired investment leads to a change in equilibrium income of
A) $10. B) $100. C) $20. D) $90.
When the bandwagon effect exists, a change in price is likely to
A) change total revenue less than if there were no network externalities. B) change total revenue more than if there were no network externalities. C) change total revenue the same amount as if there were no network externalities. D) not change total revenue at all.
The law of demand states that, ceteris paribus, an increase in
a. price causes quantity demanded to increase. b. price causes quantity demanded to decrease. c. quantity demanded causes price to increase. d. quantity demanded causes price to decrease.