Use the following diagram for the corn market to answer the question below.
If the price in this market is $4 per bushel, there will be a
A. shortage, and the price will tend to fall.
B. surplus, and the price will tend to rise.
C. surplus, and the price will tend to fall.
D. shortage, and the price will tend to rise.
Answer: C
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If both the production of goods and services increase and prices rise, then the change in nominal GDP
A) definitely understates the change in production. B) definitely accurately reflect the change in production. C) definitely overstates the change in production. D) either understates or might accurately reflect the change in production. E) More information is needed to determine how the change in nominal GDP compares to the change in production.
If additional units of a good are produced at an increasing opportunity cost, the production possibilities frontier would be bowed outward (concave)
Indicate whether the statement is true or false
In perfect competition, _____
a. economic profits are eliminated by entry in the long run b. economic profits are eliminated by exit in the long run c. price is greater than marginal cost at the profit-maximizing equilibrium d. the marginal cost curve is perfectly elastic in the long run
People can be prevented from using a good if the good is
a. a private good or a club good. b. a private good or a common resource. c. a public good or a common resource. d. a private good or a public good.