Assume that the equilibrium price for a good is $5. If the market price is $10, a:
A. shortage causes the price to decline toward $5.
B. surplus causes the price to rise above $10.
C. shortage causes the price to rise above $10.
D. surplus causes the price to decline toward $5.
Answer: D
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All points on the firm's expansion path
a. give the firm the maximum possible profit. b. minimize the firm's cost of producing some level of output. c. have the same long-run average cost. d. make the marginal product of labor equal to the marginal product of capital.
Refer to the figure above. What is the initial equilibrium employment and wage rate?
A) 10 units of labor and $25 B) 20 units of labor and $25 C) 30 units of labor and $15 D) 10 units of labor and $35
Assume that an economy is in equilibrium with a budget deficit of $130 billion, positive net exports of $453 billion, and savings equal to $1,550 billion. If taxes are zero, then planned investment spending must be equal to:
a. $1,550 billion. b. $130 billion. c. $1,873 billion. d. $1,227 billion. e. $967 billion.
Aggregate demand's downward-sloping character reflects three principal influences as shown in which of the following?
A. People's desire to maintain real wealth holdings, the interest rate, and international trade. B. People's desire to increase the price level, the interest rate, and the economic growth effect. C. The interest rate, the economic growth effect, and international trade. D. Cost-pull inflation, demand-pull inflation, and the need to maintain real wealth holdings.