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 the equilibrium price for apartments is Rs500 per month and the government imposes rent controls of Rs250 Which of the following is unlikely to to occur as a result of the rent controls?

A. there may be long lines of buyers waiting for apartments
B. landlords may discriminate among apartment renters
C. landlords may be offered bribes to rent apartments
D. there will be a storage of housing

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

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

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

Within the supply and demand model, a tax collected from the buyers of a good shifts the ?

A. Supply curve downward by the size of the tax per unit.
B. Supply curve upward by the size of the tax per unit
C. Demand curve upward by the size of the tax per unit.
D. Demand curve downward by the size of the tax per unit

Suppose that a war is fought will biological weapons. The weapons destroy people but not capital. What is likely to happen to equilibrium wages and rental rates after the war when compared to their values before the war ?

A. Wages rise, and rental rates fall
B. Wages rise, and rental rates rise
C. Wages fall, and rental rates rise
D. Wages fall, and rental rates fall

For a price ceiling to be binding constraint on the market the government must set it ?

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

An individual firm’s demand for a factor of production ?

A. Slopes downward because an increase in the production of output reduces the price at which the output can be sold in a competitive market, thereby reducing the value of the marginal producing the value of the marginal product as more of the factor is u
B. Slopes downward due to the factor’s diminishing marginal product
C. Slopes upward due to the factor’s increasing marginal product
D. Is perfectly elastic (horizontal) if the factor market is perfectly competitive

A competitive profit-maximizing firm should hire workers up to the point where ?

A. The wage, the rental price of capital and the rental price of land are all equal
B. The marginal product of labor equals zero and the production function is maximized
C. The value of the marginal product of labor equals the wage
D. The marginal product of labor equals the wage