In the figure above, originally the apartment rental market is in short-run and long-run equilibrium with a rent of $600 per month. Then the government imposes a rent ceiling of $500 per month, which causes a shortage
Suppose that apartments are a normal good and incomes rise. The increase in income A) decreases the shortage.
B) has no effect on the shortage.
C) increases the shortage.
D) raises the rent.
C
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If the supply curve of a commodity is upward sloping, and the producing country begins to export more in a pure free trade system, the domestic price of the commodity will
a. fall. b. rise. c. exceed the price in foreign countries. d. be below the price in foreign countries.
Suppose that the DeBeers company faces very little competition from other firms in the wholesale diamond market. Why isn't the price of wholesale diamonds $10,000 per carat?
a. because the government would not allow such a high price b. because stockholders would not allow such a high price c. because the company would sell so few diamonds that it would earn higher profits by selling at a lower price d. All of the above are correct.