Which of the following is correct when a price floor is set above the equilibrium price?
a. quantity supplied is less than quantity demanded at the set price
b. quantity supplied is equal to quantity demanded at the set price
c. at the set price there will be a shortage
d. The market price is greater than the price floor
e. quantity supplied exceeds quantity demanded at the set price
E
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Situation 4-1 During the winter of 1973-74, a general system of wage and price controls (including a price ceiling on gasoline) was in force in the United States. At the beginning of 1974, some oil-producing countries imposed an oil embargo (a legal prohibition on commerce) on the West. In the spring of 1974, price controls were abolished. Refer to Situation 4-1. If no price controls had been in
place, the effect of the oil embargo on the equilibrium price and quantity of gasoline would have been A) an increase in both price and quantity. B) an increase in price and a decrease in quantity. C) a decrease in price and an increase in quantity. D) a decrease in both price and quantity.
If the demand for a product increases, but the supply for the product stays the same, which of the following would happen?
a. There will be a scarcity of the product. b. There will be an equilibrium quantity of the product. c. There will be a shortage of the product. d. There will be a surplus of the product.
Which of the following is the largest source of revenue for the federal government?
A. corporate income tax B. payroll tax C. personal income tax D. user charges
Which of the following statements about markets is not true?
A. Markets necessarily have a physical location. B. The two types of markets include the factor and product markets. C. Every market transaction involves an exchange of money for goods or resources or a direct exchange of goods or resources without money called barter. D. Markets have both a demand side and a supply side.