In the market for factors of production, households earn income by supplying factors of production to firms
Indicate whether the statement is true or false
TRUE
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Suppose the demand curve for a good is given by the equation Q = 100 - P and the supply curve is given by the equation Q = 0.25P, where P represents the price of the good (measured in dollars per unit) and Q represents the quantity of the good (measured in units per week).
(i) Find the equilibrium price and quantity for this market. (ii) Suppose quantity demanded for the good rises by 10 units at every possible price while at the same time quantity supplied falls by 5 units at every possible price (with the exception that quantity supplied can not drop below zero units at any price). Find the new equilibrium price and quantity in this market. (iii) Given the change in demand, how large would the fall in supply need to be (given the same 10 unit rise in demand) in order for the price to decrease instead of increasing as in part (ii)?
The town of Marble Falls has 10 workers, of which 8 are employed and 2 are actively seeking work. The unemployment rate in Marble Falls is
A) 5%. B) 10%. C) 20%. D) 25%.
Under the liquidity premium theory, the expectation that future short-term rates will be constant results in a yield curve that
A) is flat. B) slopes upward. C) slopes downward. D) is flat, slopes upward, or slopes downward, depending on the size of the term premium at each maturity.
The arrangements that individuals have with each other to exchange goods is known as
A) demand. B) supply. C) a market. D) complements.