If a price floor is set below the equilibrium price,
A. there will be a surplus.
B. there will be a shortage.
C. quantity demanded will be less than quantity supplied.
D. the floor will be ineffective.
Answer: D
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According to the text, the price elasticity of demand for oranges has been estimated to be -0.62. This implies that a doubling of the price of oranges would cause the quantity demanded of oranges to:
A) increase by 6.2 percent. B) decrease by 6.2 percent. C) increase by 62 percent. D) decrease by 62 percent.
Which is always true at a firms profit maximizing rate of production
Which of the following is a depository institution?
a. An insurance company b. A credit union c. A finance company d. A pension fund e. A stock market
When a freely functioning market is in disequilibrium:
a. the government must set a price ceiling. b. the government must set a price floor. c. the price and quantities demanded and/or supplied change until equilibrium is established. d. it will continue to remain in disequilibrium. e. it will reach equilibrium at a very high/low price.