Figure 34-9
?
In Figure 34-9, at price OC total quantity demanded exceeds quantity supplied and price will rise to
A. OJ in Pastaland.
B. OA in Pestoland.
C. OA in both countries.
D. OJ in both countries.
Answer: C
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A shortage occurs when the quantity demanded exceeds the quantity supplied
a. True b. False Indicate whether the statement is true or false
Suppose a U.S.-made machine costs $500 and the exchange rate was 100 yen = $1 yesterday. Today the exchange rate is 90 yen = $1 . You know then that the
a. machine would now cost more dollars b. machine would now cost the Japanese firm less yen c. machine would now cost less dollars d. machine would now cost the Japanese firm more yen e. yen has depreciated in value
Find the efficient output level for this market.
The market for a chemical pesticide can be modeled as given below, where Q is measured in thousands of pounds: MSB = 20 – 0.4Q MPB = 20 – 0.3Q MSC = MPC = 12 + 0.1Q
Suppose demand is perfectly elastic, and the supply of the good in question decreases. As a result,
a. the equilibrium quantity decreases, and the equilibrium price is unchanged. b. the equilibrium price increases, and the equilibrium quantity is unchanged. c. the equilibrium quantity and the equilibrium price both are unchanged. d. buyers' total expenditure on the good is unchanged.