If the government removes a binding price floor from a market, then the price received by sellers will
a. decrease, and the quantity exchanged in the market will decrease.
b. decrease, and the quantity exchanged in the market will increase.
c. increase, and the quantity exchanged in the market will decrease.
d. increase, and the quantity exchanged in the market will increase.
b
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Goods market equilibrium in the open economy occurs when
A) desired saving equals desired investment. B) output equals desired consumption plus desired investment plus government spending. C) desired consumption equals desired investment. D) desired saving minus desired investment equals net exports.
Oscar consumes only two goods, X and Y. Assume that Oscar is not at a corner solution, but he is maximizing utility. Which of the following is NOT necessarily true?
A) MRSxy = Px/Py. B) MUx/MUy = Px/Py. C) Px/Py = money income. D) Px/Py = slope of the indifference curve at the optimal choice. E) MUx/Px = MUy/Py.