In general, non-equilibrium prices occur because:
a. information is imperfect and adjustment is costly.
b. supply curves shift along stationary demand curves.
c. demand curves shift along stationary supply curves.
d. monopolists charge prices above marginal cost.
a
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The Law of Diminishing Marginal Benefit states that:
A) the demand for a commodity declines as its price increases. B) the demand for a commodity is more dependent on income than on price. C) the willingness to pay for an additional unit declines as more of a good is consumed. D) lower levels of consumption give lower level of utility.
Which of the following is NOT a problem caused by black markets?
A) Legally banned goods are traded in black markets. B) Black markets pose a threat to legitimate businesses. C) Black markets lead to an inefficient use of society's resources. D) Black markets lead to a fall in the demand for goods.
The government can overcome the inefficiency created by a good with an external benefit by using
A) public provision. B) marketable permits. C) taxes. D) emission charges. E) None of the above answers is correct.
The equation of exchange is
A) an assumption that is not always true. B) true in the short run but not always in the long run. C) an accounting identity and therefore is always true. D) a theory developed at the Federal Reserve.