When the price of a good is above its equilibrium price, a:
a. surplus puts upward pressure on the price.
b. surplus puts downward pressure on the price.
c. shortage puts upward pressure on the price.
d. shortage puts downward pressure on the price.
b
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
If the market price of gasoline were $4 a gallon and a ceiling price of $1.50 is imposed,
a. a surplus of gasoline occurs. b. a shortage of gasoline occurs. c. the price of gasoline would remain unchanged. d. the price of gasoline would increase.
If a company plots its total profit curve, it would show
A. that the curve has a negative slope over the entire range of output. B. that the slope of the curve is negative, then zero and then becomes positive as output increases. C. that the slope of the curve is positive, then zero and then becomes negative as output increases. D. that slope is a constant at a value of one.
Which of the following would cause a rightward shift in the demand curve for gasoline?
I. A large increase in the price of public transportation. II. A large decrease in the price of automobiles. III. A large reduction in the costs of producing gasoline. A) I only B) II only C) I and II only D) II and III only E) I, II, and III