As a result of legislation to establish a floor price for milk, most dairy farmers will
a. end up earning a normal rate of return in the long run
b. end up earning a zero rate of return in the long run
c. end up earning a negative rate of return in the long run
d. benefit from the increased cost of specialized resources used in dairy farming
e. suffer if they own specialized resources at the time the legislation is passed
A
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The slope of the demand curve and the price elasticity of demand are
a. basically the same thing b. determined by supply c. are derived from production and distribution costs d. different because slope is based on absolute changes and elasticity is based on percentage changes e. implicit in the shape of the supply curve
As the marginal propensity to consume (MPC) decreases, the spending multiplier:
A. increases. B. decreases. C. remains constant. D. becomes undefinable.