A. above the equilibrium price
B. below the equilibrium price
C. precisely at the equilibrium price
D. at any price because all price ceilings are binding constraints
Related Mcqs:
- uppose a consumer must choose between the consumption of sandwiches and pizza. If we measure the quantity of pizza on the horizontal axis and the quantity of sandwiches on the vertical axis and if the price of a pizza is Rs10 and the price of a sandwich is Rs5, then the slope of the budget constraint is ?
A. 2
B. 10
C. 1/2
D. 5 - Which of the following statements about a binding price ceiling is true ?
A. The shortage created by the price ceiling is greater in the short ran than in the long run.
B. The surplus created by the price ceiling is greater in the short run than in the long run
C. The surplus created by the price ceiling is greater in the long run than in the short run
D. The shortage created by the price ceiling is greater in the long run than in the short run - A binding price ceiling creates?
A. a shortage or a surplus depending on whether the price ceiling is set above or below the equilibrium price
B. a surplus
C. a shortage
D. an equilibrium - Suppose that the world price of tin is above the target (ceiling) price that is defined by an international commodity agreement. To move the world price toward the target price, a buffer stock agreement would require its buffer stock manager to ____ tin and an export quota agreement would require that member countries _________ their export of tin?
A. purchase; decrease
B. purchase; increase
C. sell; increase
D. sell; decrease - Which of the following statements is true if the government places a price ceiling on petrol at Rs150 per litre and the equilibrium price is Rs100 per litre ?
A. A significant increase in the demand for petrol could cause the price ceiling to become a binding constraint.
B. A significant increase in the supply for petrol could cause the price ceiling to become a binding constraint.
C. There will be a shortage of petrol
D. There will be surplus of petrol - A price ceiling is ?
A. a maximum price usually set by government that sellers may charge for a good
B. the different between the initial equilibrium price and the equilibrium price after a decrease in supply
C. a minimum price usually set by government that sellers must charge for a good
D. a minimum price that consumers are willing to pay for a good. - If a producer has market power (can influence the price of the product in the market) then free market solutions ?
A. are equitable.
B. are efficient
C. maximize consumer surplus
D. are inefficient - The surplus caused by a binding price floor will be greatest if ?
A. demand is inelastic and supply in elastic
B. supply is inelastic, and demand is elastic
C. both supply and demand are elastic
D. both supply and demand are inelastic - If the price elasticity of demand for a product in market A is -0.2 and in market B is -3 a price discriminator will charge ?
A. The higher price in market A
B. The higher price in market B
C. The same Price in both markets
D. Cannot tell which price will be higher - If an increase in the price of a good has no impact on the total revenue in that market demand must be ?
A. all of these answers
B. price inelastic
C. unit price elastic
D. price elastic
