Quiz - Chapter 4 - When the price of a good is legally set...

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When the price of a good is legally set below the equilibrium level, a shortage often results. This shortage: a. is a temporary b. is the result of a shift in demand. c. is the result of a shift in supply. d. occurs because the price ceiling prevents the market mechanism from establishing an equilibrium price. Which of the following statements regarding black markets is true? a. b. The prices of goods in black markets are generally lower than the prices of similar products in legal markets. c. The laws of supply and demand do not affect the prices of goods exchanged in black markets. d. The rate of violence is higher in black markets than in legal markets. The market pricing system corrects an excess supply by: a. raising th b. lowering the product price and decreasing producer profits. c. raising the product price and decreasing producer profits. d. lowering the product price and increasing producer profits. The Laffer Curve indicates that: a. b. when tax rates are low, an increase in tax rates will generally lead to a reduction in tax revenues. c. an increase in tax rates will always lead to an increase in tax revenues.
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This note was uploaded on 06/20/2011 for the course ECON 212 taught by Professor Greene during the Spring '11 term at Wayne State University.

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Quiz - Chapter 4 - When the price of a good is legally set...

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