If the equilibrium price of bread is $2 and the government imposes a $1.50 price ceiling on the price of bread,
a. more bread will be produced to meet the increased demand
b. there will be an excess demand for bread
c. the demand for bread will decrease because suppliers will reduce their supply
d. an excess supply of bread will emerge
e. a $0.50 tax must be imposed to bring equilibrium price into accord with the price ceiling
B
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Keynesian analysis implies that potential output and price stability can be achieved if
a. the federal budget is balanced annually. b. marginal tax rates are kept low so the incentive to produce will be strong. c. aggregate demand is equal to the economy's full-employment rate of output. d. current saving exceeds the level of investment.
In a competitive market, no single producer can influence the market price because
a. many other sellers are offering a product that is essentially identical. b. consumers have more influence over the market price than producers do. c. government intervention prevents firms from influencing price. d. producers agree not to change the price.