The local government wants to ensure that broadband Internet prices never exceed $100 per month and therefore places a price ceiling at this level. If the current price of broadband Internet is $85 per month, this market exhibits:

Free trade is known as a _____ game because _____.

If a price floor is set below the equilibrium price in a market:

Suppose the United States must give up the production of one gallon of paint to produce one pair of shoes. Mexico must give up two gallons of paint to produce one pair of shoes. According to the principle of comparative advantage:

The gap between the supply curve and the market price is called “producer surplus.”

An example of a government imposed-price ceiling is:

Which of these statements reflect positive analysis? I. Main Street needs more coffee shops. II. A new parking garage on campus will reduce parking congestion. III. Last winter, the state should have spent more money on snow removal.

(Figure: Understanding Price Ceilings and Floors) In the market depicted in the graph, which price would NOT allow for an effective price ceiling?

Before a house is sold, the buyer usually inspects the property for problems. This mitigates which cause of market failure?

Suppose that a customer’s willingness to pay for a product is $79, and the seller’s willingness to sell is $64. If the negotiated price is $68, what is the consumer surplus?