Explain why the equilibrium price is called the market clearing price
What will be an ideal response?
At the equilibrium price, sellers want to sell the exact amount consumers want to buy. There is no excess demand or excess supply. The market is exactly cleared of all goods.
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If you knew that an investment was going to pay you $215,892.50 in 10 years, and you knew that the annual interest rate over that time would be 8 percent, you could calculate the present value to be:
A. $100,000. B. $150,000. C. $125,000. D. $80,000.
When discussing constant returns to specialization, it is realistic to assume that the units of resources required to produce one unit will _____ no matter where a country is on the production possibilities frontier
Fill in the blank(s) with the appropriate word(s).
Which one of the following statements is TRUE?
A. Over the years, real consumption spending has been more volatile than real investment spending. B. Over the years, real investment spending has been more volatile than real consumption spending. C. In the Keynesian model, changes in the volume of real investment spending are fully explained by changes in the real interest rate. D. Domestic real investment in the United States was highest during the Great Depression.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The economy is currently at Point B. The opportunity cost of moving from Point B to Point A is the
A. 120 LCD TVs that must be forgone to produce 20 additional OLED TVs. B. 30 LCD TVs that must be forgone to produce 40 additional OLED TVs. C. 20 OLED TVs that must be forgone to produce 30 additional LCD TVs. D. 40 OLED TVs that must be forgone to produce 120 additional LCD TVs.