Suppose Congress passes a law that states the price of gasoline ...

[fnuegbu]

Suppose Congress passes a law that states the price of gasoline may not exceed 6 per gallon (but may be lower).
 
  If the current price of gasoline is less than 6, what impact does this law have on the current price and quantity of gasoline in the US market? A) There is a shortage of gasoline
  B) There is a surplus of gasoline
  C) Quantity supplied currently equals quantity demanded, but a surplus is possible at prices above 6
  D) The law currently has no impact, and the market clears at the equilibrium price

Question 2

Governments may successfully intervene in competitive markets in order to achieve economic efficiency
 
  A) at no time; competitive markets are always efficient without government intervention.
  B) to increase the incidence of positive externalities.
  C) in cases of positive externalities only.
  D) in cases of negative externalities only.
  E) in cases of both positive and negative externalities.

[parker125]

Answer to Question 1

D

Answer to Question 2

E

[fnuegbu]

Correct answers!

[parker125]

Great! Please up vote