Suppose that the government sets a maximum price for milk at $5 a gallon and the equilibrium price of a gallon is $3. How much quantity traded will this maximum price lead to?
A. the equilibrium quantity
B. below the equilibrium quantity
C. above the equilibrium quantity
D. There is not sufficient information.
Answer: A
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Keynes believed that the way to prevent recessions and depressions was to
A) increase aggregate demand through expansionary fiscal policy. B) maximize the crowding out effect. C) only change tax rates as a means of regulating the economy. D) reduce spending when there is a recessionary ga
By paying a higher-than-market wage, a firm can avoid the problem of
a. reputation as hostage b. moral hazard c. the winner's curse d. adverse selection e. symmetrical information
It is impossible for both nations to gain when trading with one other.
Answer the following statement true (T) or false (F)
Figure 11-7
The firm in Figure 11-7 is an unregulated monopolist; it will earn long-run profits of how much?
A. 500 B. 400 C. 300 D. 200