If the government legislates a price ceiling that is above the equilibrium price
A. a shortage will develop.
B. some non-price method of rationing will develop.
C. market price and quantity sold will be unaffected.
D. a surplus will develop.
C. market price and quantity sold will be unaffected.
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Suppose that, a country with a closed economy opens itself to international trade and becomes a net exporter. In that case, the price of that good will ________ when the economy goes from closed to open for trade.
A. increase B. decrease C. first decrease then increase D. stay the same
How do legal controls on prices lead to corruption?
A. Persons who benefit from the controls are willing to bribe officials to keep the controls in place. B. Persons who make the laws may favor certain groups at the expense of others. C. Selling in the black market is very profitable, and persons therefore willingly break the law. D. Discrimination may occur as a means to limit buying or selling select groups. E. All of these responses are correct.
One reaction of firms to the adverse selection problem is to
A) rely on internal funds to finance investment. B) use the stock market rather than the bond market to raise funds. C) use the bond market rather than the stock market to raise funds. D) borrow long-term rather than short-term.
Which of the following conditions best explain the short-run economies of operation associated with production of an information product?
A) AVC slopes downward, and AFC is constant, so that ATC slopes downward. B) AVC is constant, and AFC slopes downward, so that ATC slopes downward. C) AFC is constant, and MC slopes downward, so that AVC slopes downward. D) MC is constant, and MC slopes upward, so that AVC slopes upward.