Equilibrium in a market is
a. a situation in which there are no inherent forces that produce change.
b. the natural state of affairs in the market.
c. the actual price and quantity that will exist in a market.
d. the best price and quantity that can exist in a market.
e. All of the above are correct.
a
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Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D2 and S2 (point E)
If the technology to produce motorcycles improves and the number of buyers increases, how will the equilibrium point change? A) The equilibrium point will move from E to C. B) The equilibrium point will move from E to A. C) The equilibrium point will remain at E. D) The equilibrium point will move from E to B.
The slope of the production possibilities frontier is defined to be the marginal rate of
A) transformation. B) technical substitution. C) substitution. D) profit.
Charging prices closer to what consumers are willing to pay for a good
a. Reduces consumers surplus b. Increases producer surplus c. Both a and b d. None of the above
Discuss the tools of the Federal Reserve and explain how each can be used to change the money supply and equilibrium interest rate
What will be an ideal response?