Answer the following questions true (T) or false (F)
1. A bumper corn crop will increase both producer and consumer surplus.
2. A market shortage occurs in a market when the quantity supplied at a given price exceeds the quantity demanded.
3. A market surplus occurs in a market when the quantity supplied at a given price is greater than the quantity demanded.
1. TRUE
2. FALSE
3. TRUE
You might also like to view...
The table above shows Tom's total utility from milkshakes and sodas. A milkshake costs $2.00. How much marginal utility per dollar would Tom get if he purchased the ninth milkshake?
A) 1728 units per dollar B) 20 units per dollar C) 10 units per dollar D) none of the above
The long-run supply curve in a constant-cost industry is linear and
A) upward-sloping. B) downward-sloping. C) horizontal. D) vertical. E) could have any constant slope.
Most economists think that, in the short run, there is
a. a trade-off between inflation and unemployment, but not in the long run. b. no trade-off between inflation and unemployment, nor is there one in the long run. c. a trade-off between inflation and unemployment, and in the long run also. d. no trade-off between inflation and unemployment, but there is one in the long run also.
In competitive markets, a surplus or shortage will
A. cause changes in the quantities demanded and supplied that tend to intensify the surplus or shortage. B. cause changes in the quantities demanded and supplied that tend to eliminate the surplus or shortage. C. cause shifts in the demand and supply curves that tend to eliminate the surplus or shortage. D. never exist because the markets are always at equilibrium.