When the government sets a price floor which is below the equilibrium price
A. the equilibrium price will be maintained.
B. a surplus will develop.
C. a price ceiling will follow.
D. a shortage will develop.
Answer: A
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Surgeons earn more than janitors because: a. of the negative correlation between level of education and productivity
b. of the inverse relationship between wages and productivity. c. the accumulation of human capital leads to an improvement in productivity. d. of the negative relation between productivity and the amount of physical capital. e. surgeons spend more time at work than janitors.
Given the evidence presented in the Applied Perspective on China's population policy, it appears that by decreasing the rate of population growth, China
a. is likely to experience slower economic growth in the future b. has been able to increase the size of its agricultural sector relative to the industrialsector c. has become one of the major grain exporters in the world d. will lag behind India in population in the coming years e. has been able to shift more resources into capital accumulation to promote future economic growth
At an interest rate of 6 percent, if an investment project was expected to yield $1,000 per year (to be received at year end) for each of the next three years, profit-maximizing decision makers would undertake the project only as long as the cost remained less than
a. $1,000. b. $2,577. c. $2,673. d. $3,000.
Monopoly pricing prevents some mutually beneficial trades from taking place. These unrealized, mutually beneficial trades are
a. of little concern to society. b. a deadweight loss to society. c. a sunk cost to society. d. also observed in competitive markets.