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4

An effective price ceiling usually results in:

A. Excess demand

B. Qd > Qs

C. Shortage of supply

D. All of the above

Correct Answer :

D. All of the above


Price Ceiling ?A price ceiling occurs when the government puts a legal limit on how high the price of a product can be. In order for a price ceiling to be effective, it must be set below the market equilibrium price. When a price ceiling is set, a shortage occurs. For the price that the ceiling is set at, there is more demand (excess demand) than there is at the equilibrium price. There is also less supply than there is set at the equilibrium price (shortage of supply), thus there is more quantity demanded than quantity supplied.}

Related Questions

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4

Elasticity (E) expressed by the term, 8 >E>1, is:

A. Perfectly elastic (infinitely elastic)

B. Relatively elastic (greater than one elasticity)

C. Unitary elastic

D. Relatively inelasticity (less than one elasticity)

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4

The monopolist who is producing the same output from two (or more than two) plants is concerned with:

A. Single-plant monopolist

B. Multi-plant monopolist

C. Two-plant monopolist

D. Some-plant monopolist

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4

In cournot model, during the process of adjustment, the number of firms:

A. Donot change

B. Change

C. Both a and b

D. None of the above

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4

In the modern theory of costs, the level of production which the firm considers feasible is known as:

A. Input factor

B. Heavy factor

C. Output factor

D. Load factor

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4

Identify the work of T.W.Schultz:

A. Transforming Traditional Agriculture

B. Productivity and Technical Change

C. Jobs, Poverty and the Green Revolution

D. Causes of Poverty

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4

All money costs can be regarded as:

A. Social costs

B. Opportunity costs

C. Explicit costs

D. Implicit costs

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4

If the supply curve is not a straight line but curvilinear, the elasticity on all points of the supply curve is:

A. Equal

B. Different

C. Zero

D. Infinity

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4

When in a market, the number of buyers is very large and the number of sellers is very small, it is known as:

A. Monopoly

B. Oligopoly

C. Imperfect competition

D. Perfect competition

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4

In substitution effect, we:

A. Move to another indifference curve

B. Move along given indifference curve

C. Move to a higher indifference curve

D. Move to a lower indifference curve

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4

The slutsky demand curve includes:

A. Income effect

B. Price effect

C. Substitution effect

D. None of the above

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4

The long run total cost is attained by:

A. LMC.Q

B. AC.Q

C. LC.Q

D. LAC.Q

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4

Micro economics is concerned with:

A. Product markets

B. Factor markets

C. Supply and demand

D. a, b and c

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4

The minimization of costs subject to output requires equilibrium at the lowest:

A. Isoquant line

B. Isocost line

C. Indifference curve

D. Price line

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4

A monopoly producer has:

A. Control over production but not over price

B. Control neither on production nor on price

C. Control over consumers

D. Control over production as well as over price

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4

When marginal costs curve cuts average costs curve, average costs are:

A. Maximum

B. Zero

C. Minimum

D. Equal to one

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4

A shift in the demand for a product is likely to result from a change in:

A. The products price

B. Expectations

C. The prices of factors of production used to produced it

D. Production technology

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4

By scarcity the economist means that all goods are scarce relative the peoples:

A. Desire for them

B. Purchases

C. Production

D. Consumption

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4

In case of giffin good, price effect is:

A. Positive

B. Negative

C. Neutral

D. Infinite

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4

In case the two commodities are complements, cross elasticity will be:

A. Positive

B. Unitary

C. Negative

D. Infinite

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4

We can write ordinal utility function as:

A. U = x1 x2

B. U = x1 + x2

C. U = y1 +x1

D. U = x1.x2

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4

The reserve capacity in administration is advocated on the ground that demand for a product will:

A. Decrease in the future

B. Increase in the future

C. Remain constant

D. None of the above

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4

Some economists refer to iso-product curves as:

A. Engels curve

B. Production indifference curve

C. Budget line

D. Ridge line

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4

A firm enjoys maximum control over the price of its product under:

A. Monopoly

B. Perfect competition

C. Oligopoly

D. Imperfect competition

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4

When the level of optimal factor combination is over and more labor is employed with the fixed plant, the efficiency of labor:

A. Increases

B. Decreases

C. Remains constant

D. Becomes zero

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4

If the marginal utility of apples to a consumer exceeds that of bananas then the consumer:

A. Is not in equilibrium

B. Will not buy any banana

C. Will buy some banana but less than he buys of apples

D. Is willing to pay more for apples than bananas

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4

If the commodity is normal then Income Effect (I.E) is:

A. Negative

B. Positive

C. Zero

D. Infinite

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4

Cross-elasticity of demand or cross-price elasticity between two perfect substitutes will be:

A. Negative

B. Positive

C. Infinite

D. Zero

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4

Marginal cost is found with the help of changes in:

A. Total cost or total variable cost

B. Total explicit cost

C. Total fixed cost

D. Total implicit cost

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4

The MC curve cuts the AVC and ATC curves:

A. At different points

B. At the falling parts of each

C. At their respective minimums

D. At the rising parts of each

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4

A significant property of the Cobb-Douglas production function is that the elasticity of substitution between inputs is:

A. Greater than one

B. Less than one

C. Zero

D. Equal to one