Assume that the market clearing price for a shirt is 20, but that the maximum price that can be charged is 15. This is an example of
A) a price control that will lead to a surplus of shirts on the market.
B) a price floor that will lead to a shortage of shirts on the market.
C) markets failing to ration a fixed quantity of a good.
D) a price ceiling that will likely lead to a shortage of shirts on the market.
Ques. 2The industry concentration ratio measures the
A) value of the assets owned by the largest corporations in the market.
B) percentage of industry sales accounted for by the top four or eight firms.
C) difference between price and marginal cost for the largest firms in the industry.
D) degree of product differentiation in the market.
Ques. 3The demand for money curve
A) shows the relationship between money demanded and open market operations.
B) shows the relationship between the quantity of money balances demanded and the interest rate.
C) is positively related to the interest rate.
D) varies inversely with the supply of money.
Ques. 4All mutually beneficial trades have taken place. This implies that
A) the production possibilities curve is bowed out.
B) society is inside the production possibilities curve.
C) economic efficiency prevails in the society.
D) society is on the constant cost portion of its production possibilities curve.
Ques. 5The imposition of a new excise tax will
A) increase equilibrium price and increase equilibrium quantity.
B) increase equilibrium price and decrease equilibrium quantity.
C) decrease equilibrium price and increase equilibrium quantity.
D) decrease equilibrium price and decrease equilibrium quantity.
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