Suppose demand decreases, but there is no change in supply. As the market reaches its new equilibrium:
A. excess supply will lead the price to rise.
B. excess demand will lead the price to fall.
C. excess supply will lead the price to fall.
D. excess demand will lead the price to rise.
Answer: C
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Total net benefits gained in a market
a. minus any side payments equals total revenue from producing the good (or, equivalently, total expenditure on the good) b. is the sum of producer and consumer surplus in that market c. is the difference between consumer surplus and producer surplus in that market d. are maximized when the market price equals zero e. always exceeds the sum of total expenditure on the good and the total cost of providing it
Refer to the above diagram, which shows demand and supply conditions in the competitive market for product X. If supply is S1 and demand D0, then
A. 0F represents a price that would result in a surplus of AC. B. a surplus of GH would occur. C. 0F represents a price that would result in a shortage of AC. D. at any price above 0G a shortage would occur.
The method of constructing a measure of technological progress relies on which of the following assumptions?
A) each factor of production is paid its marginal product B) population growth does not change C) population growth is zero D) the saving rate does note change
Using cost plus pricing, what is the price if ATC = $23.50 and the target rate of return is 17 percent?
A. $29.38 B. $138.24 C. $46.74 D. $28.31