Which of the following is an example of an unintended consequence?
a. first time tax credits that cause more home sales
b. a price ceiling on gasoline that causes a gas shortage and leads some gas stations to go out of business.
c. increased parking fines that lead to fewer violators
d. all of the above
b
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Shortages occur at prices which are above the market clearing price
Indicate whether the statement is true or false
The figure above provides information about Light-U-Up Utilities, which is a natural monopoly that provides electricity. At the unregulated price and quantity, Light-U-Up's economic profit is equal to
A) -$10. B) $10. C) $40. D) $60.
Interest-rate risk is the riskiness of an asset's returns due to
A) interest-rate changes. B) changes in the coupon rate. C) default of the borrower. D) changes in the asset's maturity.
Other things being equal, an increase in the price of gasoline will decrease the quantity demanded for gasoline
a. True b. False Indicate whether the statement is true or false