When the current price of a good is below the equilibrium price:
A. sellers will notice their inventories are growing.
B. the price will tend to stay below the equilibrium price.
C. buyers have an incentive to offer to pay sellers more than the current price.
D. there will be excess supply.
Answer: C
You might also like to view...
Why should the development of a solid elementary education system take precedence over an expansion of the university system in developing countries?
What will be an ideal response?
Scatterbrain Samantha often forgets to lock her house. This has caused the probability of a burglary to be 30%. If her house gets broken into, she faces a property loss of $10,000, otherwise she gets to keep her $100,000 . If Samantha is offered an insurance policy for her house to protect her from loss at $3,000, would she buy the insurance?
a. Yes because she gets to now enjoy her wealth risk-free b. No, because she can take the risk and be better off c. Yes, because she is a risk lover d. None of the above
Which of the following statements is true?
a. Competitive markets result in the socially efficient price and quantity when externalities exist. b. Command-and-control regulations set an environmental goal and dictate how the goal will be achieved. c. Economists prefer command-and-control regulations to incentive-based pollution programs. d. An effluent tax is a tax imposed on rich people.
Which of the following is correct?
a. A higher price level shifts money demand rightward. b. When money demand shifts rightward, the interest rate rises. c. A higher interest rate reduces the quantity of goods and services demanded. d. All of the above are correct.