In the supply-demand models to analyze the wheat market, we assume that wheat sold by different sellers is largely the same. We make this assumption
A) to test the model.
B) to easily predict the market price.
C) to simplify the model while keeping important details.
D) to avoid the complexities in the real world.
C
You might also like to view...
To derive the external balance relationship under high capital mobility and floating exchange rates, an increase in government spending must be followed by
A) an increase in money stock to restore the balance of payments equilibrium. B) a decrease in money stock to restore the balance of payments equilibrium. C) a depreciation of the currency to restore the balance of payment equilibrium. D) a decrease in investment spending to restore the balance of payments equilibrium.
James owns two houses. He rents one house to the Johnson family for $10,000 per year. He lives in the other house. If he were to rent the house in which he lives, he could earn $12,000 per year in rent. How much do the housing services provided by the two houses contribute to GDP?
a. $0 b. $10,000 c. $12,000 d. $22,000
This graph demonstrates the domestic demand and supply for a good, as well as the world price for that good.
According to the graph shown, if this economy were to open to trade, domestic producers would increase:
A. experience deadweight loss of FG. B. enjoy a net gain to surplus of BC. C. suffer a net loss to surplus of BCD. D. suffer a transfer of surplus to producers of BC.
Figure 4.3 illustrates the demand for tacos. Assume that tacos and burritos are substitutes. A decrease in the price of burritos would bring about a movement from:
A. point a to point c. B. point c to point b. C. D2 to D0. D. D1 to D2.