A price floor in a perfectly competitive market
a. creates more harm for sellers than gain for buyers
b. is effective only it is set at the equilibrium price
c. is a Pareto improvement
d. can turn an inefficient outcome into an efficient outcome
e. creates more harm for buyers than gain for sellers
E
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Use the following market-for-money diagrams to answer the next question.
If the Federal Reserve increased the stock of money, the
A. S curve would shift leftward and the equilibrium interest rate would rise. B. D3 curve would shift leftward and the equilibrium interest rate would rise. C. S curve would shift rightward and the equilibrium interest rate would fall. D. D3 would shift leftward and the equilibrium interest rate would fall.
If the expected future U.S. exchange rate falls, then in the foreign exchange market the current
A) supply of dollars decreases. B) demand for dollars increases. C) quantity supplied of dollars decreases. D) supply of dollars increases. E) quantity supplied of dollars increases.
In the above figure, if the market produces the efficient amount of purses, then consumer surplus equals triangle
A) abc. B) bcd. C) adc. D) cgf.
Which of the following situations is represented by a nearly horizontal supply curve for a good?
a. Small price changes lead to small changes in quantity demanded of the good. b. Small price changes lead to small changes in quantity supplied of the good. c. Producers of the good are not operating efficiently. d. Producers of the good are not maximizing profit. e. Small changes in the price of the good lead to large changes in the quantity supplied of the good.