Answer the following statement(s) true (T) or false (F)
1. Market demand for a private good is found by vertically summing individual demands.
2. The supply curve is positively sloped because marginal cost (MC) rises with output (Q).
3. If QS = –10 + ½ P, the slope of supply, when conventionally graphed, is +½ .
4. Equilibrium price is the price level at which QD equals QS.
5. If the price level is such that quantity supplied exceeds quantity demanded, there is excess demand, or a shortage in the market.
1. False
2. True
3. False
4. True
5. False
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Based on the model of the money market, if the Federal Reserve increases the reserve requirement, the equilibrium interest rate should
A) stay the same. B) increase. C) decrease. D) increase to the same extent that the demand for money increases.
Pluralistic ignorance exists when the members of a group believe one thing but mistakenly assume that most of the other members believe something else
Indicate whether the statement is true or false
Open market operations generally involve
A) the Fed making discount loans to depository institutions. B) the Fed buying and selling common stock in order to affect the liquidity of the stock market. C) the Fed buying and selling U.S. government securities. D) private investors buying and selling securities directly on exchanges, rather than through brokers.
What would happen to the short-run and long-run aggregate supply curves if the capital stock grew and available supplies of natural resources expanded over the same period of time?