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Question
In the long run, surviving firms in monopolistic competition earn
a. higher than normal economic profit.
b. zero economic profit.
c. less than normal profits.
d. significant economic losses.
e. praise from the government for achieving allocative efficiency.
Answer
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b. relatively unresponsive to a change in price.
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Price gouging laws will usually result in ________ the product in the distressed market.
a. more supply of
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The economic entity most likely to engage in price gouging is
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Q:
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What will an individual do differently as a buyer in the black market in the long run?
a. He or she will substitute away from the product.
b. He or she will substitute toward the product.
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d. When a binding price ceiling exists, he or she will be willing to pay a lower price.
e. What he or she does as a buyer in the long run will be no different from what he or she does in the short run.
Q:
What is the long-run consequence of a price ceiling law?
a. A surplus will continue to exist and will grow larger over time.
b. A surplus will continue to exist and will grow smaller over time.
c. A shortage will continue to exist and will grow larger over time.
d. A shortage will continue to exist and will grow smaller over time.
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Q:
Suppose Solomon lives in a community with no price controls. What do you expect will happen if his town borders a community where there is a binding price ceiling on most products?
a. Prices in the legal market in the community with a binding price ceiling will rise.
b. Prices in the legal market in the community with a binding price ceiling will fall.
c. There will be shortages in the community with a binding price ceiling.
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c. The binding price ceiling will increase the likelihood that consumers will obtain needed drugs on the black market.
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Suppose Kate lives in a community with no price controls. What could she expect will happen if her town borders a community where there is a nonbinding price ceiling on most products?
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Q:
Why would a politician find it difficult to remove a binding price ceiling?
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Taxing goods with very inelastic demand generates less deadweight loss than taxing goods with very elastic demand because
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A(n) ________ in the elasticity of supply or demand in a market for a good that is taxed would tend to ________ who is legally responsible for paying the tax.a. decrease; broaden b. decrease; have no effect on c. increase; broadend. increase; narrowe. increase; have no effect on
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a. Demand for jelly will increase along with the price.
b. Demand for jelly will decrease along with the price.
c. The supply of jelly will increase and the price will decrease.
d. Both the supply and demand for jelly will increase along with the price.
e. The supply of jelly will decrease and the price will increase.
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Q:
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