If adverse selection exists in a market
A) the government steps in and shuts it down.
B) the market is considered a "grey market."
C) consumers may not participate in the market at all.
D) total surplus is maximized.
C
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Figure 4-17
Refer to . Suppose a price ceiling of $4.50 is imposed. As a result,
a.
there is a shortage of 15 units of the good.
b.
the demand curve will shift to the left so as to now pass through the point (Q = 35, P = $4.50).
c.
the situation is very much like the one created by a binding minimum wage.
d.
the quantity of the good that is bought and sold is the same as it would have been had a price floor of $7.50 been imposed.
Classical economists believe that when the aggregate supply curve is horizontal, monetary policy and fiscal policy will have no effect on real output.
Answer the following statement true (T) or false (F)