Suppose that the quantity of cars demanded exceeds the quantity of cars supplied. We would expect that:
A. the price of cars will increase.
B. the price of cars will decrease.
C. the supply will increase (supply will shift to the right) to meet the demand.
D. the demand will decrease (demand will shift to the left) to meet the supply.
Answer: A
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In the long run, economic growth is determined by
A simple linear demand function may be stated as Q = a - bP + cI where Q is quantity demanded, P is the product price, and I is consumer income
To compute an appropriate value for c, we can use observed values for Q and I and then set the estimated income elasticity of demand equal to: A) c(I/Q) B) c(Q/I) C) -b(I/Q) D) Q/(cI)
Because monopolistically competitive firms produce differentiated products, each firm
a. faces a demand curve that is horizontal. b. faces a demand curve that is vertical. c. has no control over product price. d. has some control over product price.
If the price elasticity of demand is 1.5, and a firm raises its price by 20 percent, the quantity sold by the firm will, ceteris paribus:
A. Rise by 13.3 percent. B. Fall by 13.3 percent. C. Rise by 30.0 percent. D. Fall by 30.0 percent.