Refer to the above figure. If a price floor of $3 was set
A) the quantity sold would be 80 units.
B) there would be a surplus of 40 units.
C) there would be a shortage of 40 units.
D) there would be a shortage of 20 units.
A
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A surplus occurs when the market price is lower than the equilibrium price
Indicate whether the statement is true or false
The natural rate of interest is the rate
A) which equates saving and investment under any employment condition. B) which equates saving and investment with acceptable, but low, unemployment. C) which equates saving and investment at an unemployment rate of 5 percent or less. D) which equates saving and investment at full employment.
The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
Which of the following statements about indexed bonds is correct?
A) They were relatively recently introduced in the United States. B) They exist in England. C) They have a nominal interest rate that rises when the inflation rate rises. D) all of the above E) none of the above