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1. the substitution effect of a price change is strictly negative: true/ fals e 2. price...

1. the substitution effect of a price change is strictly negative:
true/ fals e
2. price floor is a government regulation stipulating the maximum price that can be charged for a product:
true/ false
3. Returns to scale is a concept relevant s only in:
a. the short run
B. the long run
c. both the short run and long run
d. the so called very long run
4. shortage is a situation where the supply is greater than the quantity demanded:
true/false

can you please give me answers of these mcq as soon as possible.

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Homework Answers

Answer #1

1) True. Substitution effect of all types of goods is negative. When price of one good increases, more units of that good are consumed according to substitition effect.

2) True.

Price floor is the minimum price that could be charged, and it is set above the market price. It is set to help the producers.

3) Answer is B. In long run.

4) False

Shortage is a situation in which quantity demanded is greater than quantity supplied.

It occurs when current price is below the free market equilibrium price.

#Please rate positively...thank you

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